LOAN AND SECURITY AGREEMENT

     THIS LOAN AND  SECURITY  AGREEMENT,  dated as of  October  ____,  2000,  is
entered into between CAPITAL  BUSINESS  CREDIT,  a division of CAPITAL  FACTORS,
INC., a Florida  corporation  ("Capital"),  and eNetpc,  Inc., formerly known as
CyberStar Computer Corporation, a Minnesota corporation ("Borrower").

     The parties agree as follows:

     1 DEFINITIONS
       -----------

     In addition to the defined terms contained in the first paragraph above, as
used herein, the following terms shall have the following definitions:

     1.1 "Accounts" means all accounts  receivable due to Borrower,  book debts,
notes,  drafts and  acceptances  and other forms of obligations now or hereafter
owing to the  Borrower,  whether  arising from the sale or lease of goods or the
rendition  of services  by the  Borrower  (including,  without  limitation,  any
obligation that might be  characterized as an account,  contract right,  general
intangible or chattel paper under the Code), all of the Borrower's rights in, to
and under all  purchase  orders now or  hereafter  received by the  Borrower for
goods and services, all proceed from the sale of Inventory, all monies due or to
become due to the Borrower under all contracts for the sale or lease of goods or
the  rendition  of  services  by  the  Borrower  (whether  or  not  yet  earned)
(including,  without  limitation,  the right to  receive  the  proceeds  of said
purchase  orders and contracts),  all collateral  security and guarantees of any
kind given by any obligor  with respect to any of the  foregoing,  and all goods
returned  to or  reclaimed  by  the  Borrower  that  correspond  to  any  of the
foregoing;

     1.2 "Agreement" means this Loan and Security Agreement and any supplements,
amendments or modifications to this Loan and Security Agreement.

     1.3 "Book  Value"  means with  respect to any Account  means the book value
thereof as determined in accordance with GAAP.

     1.4 "Borrowing Base  Certificate"  means the certificate,  substantially in
the form of Exhibit A, with appropriate  insertions,  to be submitted to Capital
by Borrower  pursuant to this Agreement and certified as true and correct by the
Chief Executive Officer or the Chief Financial Officer of Borrower.

     1.5 "Borrower's Books" means all of Borrower's books and records including,
but not limited to:  ledgers;  records  indicating,  summarizing  or  evidencing
Borrower's assets,  liabilities,  and the Accounts;  all information relating to
Borrower's business operations;  and all computer programs,  disc or tape files,
printouts,  runs,  and other  computer  prepared  information  and the equipment
containing such information.

     1.6  "Business  Day" means any day excluding  Saturday,  Sunday and any day
which is a legal  holiday  under the laws of the State of Georgia or is a day on
which  Capital is otherwise  closed for  transacting  business  with the general
public.

     1.7 "Capital Expenses" means all of the following:  (i) taxes and insurance
premiums  required to be paid by  Borrower  under this  Agreement  or any of the
other  Loan  Documents  which are paid or  advanced  by  Capital;  (ii)  filing,
recording,  publication  and search fees paid or incurred by Capital;  and (iii)
the costs,  fees  (including  reasonable  attorneys' and  paralegals'  fees) and
expenses  incurred by or charged to  Capital:  (a) to examine  Borrower  and the
Collateral;  (b) to  correct  any  default  or  enforce  any  provision  of this
Agreement,  any of the other Loan Documents and any guaranty of the Obligations,
whether  or  not  litigation  is  commenced;   (c)  in  gaining  possession  of,
maintaining,  handling,  preserving,  storing, shipping,  selling, preparing for
sale  and/or  advertising  to  sell  the  Collateral,  whether  or not a sale is
consummated;  (d) in collecting the Accounts and in collecting the  Obligations,
whether from Borrower, any guarantor or both; and (e) in structuring,  drafting,
reviewing,  amending, defending or concerning this Agreement or any of the other
Loan Documents.

     1.8 "Closing Fee" shall have the meaning set forth in Section 2.3.9

     1.9 "Code" means the Georgia Uniform Commercial Code, and any and all terms
used in this Agreement  which are defined in the Code and are not defined herein
shall be construed and defined in accordance  with the  definition of such terms
under the Code.

     1.10 "Collateral" means each and all of the following:

               A.   the Accounts;

               B.   the Inventory;

               C.   the Equipment,

               D.   the General Intangibles;

               E.   the Negotiable Collateral;

               F.   the Borrower's Books;

               G.   any money,  deposit  accounts or other assets of Borrower in
                    which  Capital   receives  a  security   interest  or  which
                    hereafter  come into the  possession,  custody or control of
                    Capital; and

               H.   the  proceeds of any of the  foregoing,  including,  but not
                    limited to,  proceeds of insurance  covering the Collateral,
                    or any portion thereof, and any and all Accounts, Inventory,
                    Equipment,  General Intangibles,  Negotiable Collateral, the
                    Borrower's Books, money,  deposit accounts or other tangible
                    and  intangible  property  resulting  from the sale or other
                    disposition  of the  Collateral,  or any portion  thereof or
                    interest therein, and the proceeds thereof.

     1.12 "Daily  Balance"  means and refers to the amount  determined by taking
the amount of the  Obligations  owed at the beginning of a given day, adding any
new Obligations  advanced or incurred on such date, and subtracting any payments
or collections  which are deemed to be paid on that date under the provisions of
this Agreement.

     1.13  "Dilution"  means  any and all  reductions  in  Accounts  that do not
represent cash reductions.

     1.14 "Eligible  Accounts"  means and includes those Accounts (i) which have
been validly  assigned to Capital,  (ii) strictly  comply with all of Borrower's
warranties,  covenants and  representations  to Capital,  (iii) contain  payment
terms of not greater than the number of Term Days (as defined on Schedule 1), or
less,  from the date of invoice,  and (iv) are not past due more than the number
of Past Due Days (as defined on Schedule 1);  provided,  however,  that Eligible
Accounts shall not include the following: (a) Accounts with respect to which the
account debtor is an officer,  employee or agent of Borrower;  (b) Accounts with
respect to which services or goods are placed on consignment,  guaranteed  sale,
or other  terms by reason of which the  payment  by the  account  debtor  may be
conditional  (other  than that  portion  of the  Accounts  which are  subject to
retention);  (c)  Accounts  with  respect to which the  account  debtor is not a
resident of the United  States;  (d) Accounts  with respect to which the account
debtor is the United States or any department,  agency or instrumentality of the
United States; provided, however, that an Account shall not be deemed ineligible
by  reason  of this  clause  (d) if  Borrower  has  completed  all of the  steps
necessary, in the sole opinion of Capital, to comply with the Federal Assignment
of Claims Act of 1940 (31 U.S.C.  ss.1/4(R)1/2(R)) with respect to such Account;
(e) Accounts with respect to which the account debtor is any state of the United
States or any city, town, municipality, county or division thereof; (f) Accounts
where the account debtors are located in New Jersey and/or  Indiana,  unless the
Borrower  shall have  qualified  to do  business  or shall have filed a Business
Activity Report with the appropriate  state offices in such  jurisdictions,  (g)
Accounts with respect to which the account  debtor is a subsidiary  of,  related
to,  affiliated  with, or has common  officers or directors with  Borrower;  (h)
Accounts  with  respect to which  Borrower  is or becomes  liable to the account
debtor for goods sold or services  rendered by the account  debtor to  Borrower;
(i) those  Accounts  where Capital has notified the Borrower  that, in Capital's
sole discretion, the account or account debtor is not acceptable to Capital; (j)
all of the  Accounts  owed  by an  account  debtor  who  is  the  subject  of an
Insolvency  Proceeding;  (k) all of the Accounts owed by an account debtor where
the Cross  Aging  Percentage  (as  defined on  Schedule 1) or more of all of the
Accounts  owed by that  account  debtor are past due more than the Past Due Days
from the invoice due date; (l) Accounts for which the services have not yet been
rendered to the account  debtor or the goods sold have not yet been delivered to
the account debtor (commonly referred to as "pre-billed accounts"); (m) Accounts
not  previously  approved by Capital  where the  expected  dollar value for such
account  debtor is  greater  than  twenty  (20%)  percent of  Client's  existing
Accounts and (n) COD and cash sales.

     1.15 INTENTIONALLY OMITTED

     1.16  "Equipment"  means all of Borrower's  present and hereafter  acquired
machinery, machine tools, motors, equipment, furniture,  furnishings,  fixtures,
motor vehicles,  tools, parts, dies, jigs, goods, and any interest in any of the
foregoing,   and  all  attachments,   accessories,   accessions,   replacements,
substitutions, additions and improvements thereto, wherever located.


     1.17 "Event of Default"  means the  occurrence of any one of the events set
forth in Section 9.

     1.18 "GAAP" means generally accepted accounting principles set forth in the
opinions and  pronouncements of the Accounting  Principles Board of the American
Institute of Certified Public  Accountants and statements and  pronouncements of
the  Financial   Accounting   Standards   Board  that  are   applicable  to  the
circumstances as of the date of determination and applied on a consistent basis.

     1.19  "General  Intangibles"  means all of  Borrower's  present  and future
general  intangibles  and  all  other  presently  owned  or  hereafter  acquired
intangible personal property of Borrower (including, without limitation, any and
all choses or things in action,  goodwill,  patents,  trade  names,  trademarks,
blueprints, drawings, purchase orders, customer lists, monies due or recoverable
from  pension  funds,  route  lists,  infringement  claims,  computer  programs,
computer discs, computer tapes, literature, reports, catalogs, deposit accounts,
tax refunds and tax refund  claims)  other than goods and  Accounts,  as well as
Borrower's Books relating to any of the foregoing.

     1.20 "Governing Rate" shall have the meaning set forth in Section 2.3.5.

     1.21 "Guarantor" means  individually,  and "Guarantors" means collectively,
the persons and entities listed on Schedule 1 as Guarantors.

     1.22 "Insolvency  Proceeding" means any proceeding  commenced by or against
any person or entity under any  provision  of the federal  Bankruptcy  Code,  as
amended,  or under any other  bankruptcy or insolvency law,  including,  but not
limited  to,  assignments  for the  benefit  of  creditors,  formal or  informal
moratoriums, compositions or extensions generally with its creditors.

     1.23  "Inventory"  means and includes all of Borrower's  present and future
inventory in which  Borrower has any  interest,  including,  but not limited to,
goods held for sale or lease or to be furnished  under a contract of service and
all of Borrower's  present and future raw materials,  work in process,  finished
goods, and packing and shipping materials,  wherever located,  and any documents
of title representing any of the above.

     1.24  "Judicial   Officer  or  Assignee"   means  any  trustee,   receiver,
controller, custodian, assignee for the benefit of creditors or any other person
or entity  having powers or duties like or similar to the powers and duties of a
trustee,  receiver,  controller,  custodian  or  assignee  for  the  benefit  of
creditors.  1.25  "Loan  Account"  shall have the  meaning  set forth in Section
2.3.12

     1.26 "Loan  Documents"  means  collectively  this  Agreement  and any other
agreements  entered into between  Borrower and Capital in  connection  with this
Agreement.

     1.27 "Lock Box" means that certain post office box  maintained on behalf of
Capital  (as  described  on  Schedule  1) into  which the  Borrower  shall  have
instructed all of its account debtors to remit payments.

     1.28 "Lock Box Account"  means that account owned by Capital into which all
proceeds  of  Accounts  and all  other  payments  received  in the  Lock Box are
deposited.

     1.29 Intentionally Omitted

     1.30 "Maximum Credit Line" has the meaning set forth on Schedule 1.

     1.31  "Negotiable  Collateral"  means all of Borrower's  present and future
letters of credit,  advises of credit,  notes, drafts,  instruments,  documents,
leases,  and  chattel  paper,  and  Borrower's  Books  relating  to  any  of the
foregoing.

     1.32 "Net Worth" means,  as of any date, the total assets of Borrower minus
the total liabilities of Borrower calculated in conformity with GAAP.

     1.33 "Obligations" means any and all loans,  advances,  debts,  liabilities
(including,  without  limitation,  any and all  amounts  charged  to  Borrower's
account  pursuant  to any  agreement  authorizing  Capital to charge  Borrower's
account), obligations, lease payments, guaranties, covenants and duties owing by
Borrower to Capital of any kind and description (whether advanced pursuant to or
evidenced  by this  Agreement,  any of the other  Loan  Documents,  or any other
instrument,  or by any other agreement  between Capital and Borrower and whether
or not for the  payment of  money),  whether  direct or  indirect,  absolute  or
contingent,  due or to become  due,  now  existing  or  hereafter  arising,  and
including,  without  limitation,  any debt,  liability or obligation  owing from
Borrower to others which  Capital may have  obtained by assignment or otherwise,
and further including,  without  limitation,  all interest not paid when due and
all Capital  Expenses  which  Borrower is required to pay or  reimburse  by this
Agreement, by law, or otherwise.

     1.34 "Over Advance" shall have the meaning set forth in Section 2.1.

     1.35  "Payment  Items" means all checks,  drafts and other items of payment
payable to the Borrower, including proceeds of any of the Collateral.

     1.36 "Prime Rate" shall mean,  at any time,  the rate of interest  noted in
the Wall Street  Journal,  Money Rates  Section as the "Prime  Rate"  (currently
defined  as the base  rate on  corporate  loans  posted  by at least  75% of the
nation's thirty (30) largest banks),  with the Prime Rate in effect on the first
day of a month being  applicable to the entire month. In the event that the Wall
Street Journal quotes more than one rate, or a range of rates as the Prime Rate,
then the Prime  Rate shall mean the  average of the quoted  rates.  In the event
that the Wall Street Journal ceases to publish a Prime Rate, then the Prime Rate
shall be the  average of the three (3)  largest  U.S.  money  center  commercial
banks, as determined by Capital.  The "Prime Rate" may not be the lowest or best
rate at which Capital calculates interest or extends credit.

     1.37 "Subordinating Creditor" means collectively,  the persons and entities
listed on Schedule 1 as Subordinating Creditor.

     1.38 "Subordinated  Debt" means all of the indebtedness owed by Borrower to
any third parties,  including the Subordinating Creditor, the repayment of which
is subordinated  to the repayment of the Obligations  pursuant to the terms of a
subordination agreement approved by Capital in its sole and absolute discretion.

     1.39 "Tangible Net Worth" means an amount equal to the stockholders' equity
of the  Borrower  increased by  Subordinated  Debt and  decreased by  intangible
assets.

     1.40 "Term" shall have the meaning set forth on Schedule 1.

     1.41  "Working  Capital"  means the amount  determined by  subtracting  the
aggregate amount of Borrower's current  liabilities from the aggregate amount of
Borrower's  current assets.  Borrower's  current  liabilities and current assets
shall be determined in accordance with GAAP consistently applied.

     1.42   Other   Definitional    Provisions.    References   to   "Sections",
"subsections",  and "Exhibits" shall be to Sections,  subsections, and Exhibits,
respectively,  of this Agreement unless otherwise  specifically provided. Any of
the terms defined in Section 1 may, unless the context  otherwise  requires,  be
used  in the  singular  or  the  plural  depending  on the  reference.  In  this
Agreement,  words  importing  any gender  include the other  genders;  the words
"including,"  "includes"  and  "include"  shall be deemed to be  followed by the
words  "without  limitation";  references  to agreements  and other  contractual
instruments shall be deemed to include subsequent amendments,  assignments,  and
other modifications thereto, but only to the extent such amendments, assignments
and other  modifications  are not  prohibited  by the  terms of this  Agreement;
references to any person  includes  their  respective  permitted  successors and
assigns or people succeeding to the relevant functions of such persons;  and all
references to statutes and related  regulations  shall include any amendments of
same and any successor statutes and regulations.

     2. LOANS AND TERMS OF PAYMENT
        --------------------------

     Manner of Borrowing Advances (revolving loans). Borrowings under the credit
facility established hereunder shall be as follows:


     2.1 Advance  Requests.  A request for an advance (also known as a revolving
loan) shall be made,  or shall be deemed to be made,  in the  following  manner:
Borrower may give  Capital  notice of its  intention to borrow,  in which notice
Borrower  shall  specify the amount of the proposed  borrowing  and the proposed
borrowing date, no later than 11:00 a.m. on the proposed borrowing date. Capital
may lend to Borrower,  in Capital's sole and absolute discretion,  (a) up to the
Advance  Percentage  (as defined on Schedule 1) of the net amount of  Borrower's
Eligible  Accounts (the "net amount" of Eligible Accounts means the gross amount
of said Eligible  Accounts less returns and discounts based upon the shortest or
longest payment terms as Capital may elect,  credits or allowances of any nature
at any time issued,  owing,  claimed by account debtors,  granted or outstanding
based upon the Borrowing Base Certificate  which must be submitted to Capital in
connection with such request),  not to exceed at any time (b) the Maximum Credit
Line. Provided,  further, that no such request for an advance may be made (i) at
a time when  there  exists  an Event of  Default;  and (ii)  unless  payment  is
otherwise timely made by Borrower, the becoming due of any amount required to be
paid under this  Agreement  or any of the other Loan  Documents,  as  principal,
accrued interest, fees or Capital Expenses,  shall be deemed irrevocably to be a
request by Borrower  from  Capital for an advance or  revolving  loan on the due
date of, and in an aggregate  amount  required to pay, such  principal,  accrued
interest,  fees, Capital Expenses or other charges and the proceeds of each such
advance or revolving  loan may be disbursed by Capital by way of direct  payment
of the  relevant  Obligation  and shall bear  interest  at the rate of  interest
applicable  to the  Daily  Balance  (whether  or not any  Event  of  Default  or
Over-Advance  exists at the time of or would  result from such  advance).  As an
accommodation  to  Borrower,   Capital  may  permit  electronic  transmittal  of
instructions or requests for advances, authorizations,  agreements or reports to
Capital by Borrower, received from any one or more of the authorized officers of
the  Borrower  identified  on  Exhibit B hereto.  In no event  shall  Capital be
obligated  to make  advances  to  Borrower  under this  Section 2  whenever  the
aggregate  amount of the then  outstanding  advances  made pursuant to Section 2
exceeds or would exceed as a result of the requested advance, the Maximum Credit
Line. Unless Borrower  specifically  directs Capital in writing not to accept or
act upon telecopied or electronic  communications  from Borrower,  Capital shall
have no liability  to Borrower for any loss or damage  suffered by Borrower as a
result of Capital's  honoring of any  requests,  execution of any  instructions,
authorizations or agreements or reliance on any reports  communicated to Capital
electronically  and  purporting  to have been sent to  Capital by  Borrower  and
Capital shall have no duty to verify the origin of any such communication or the
authority of the person  sending it. All of the advances  made  pursuant to this
Section 2.1 and any supplement,  if any, to this Agreement shall be added to and
deemed part of the  Obligations  when made.  If, at any time and for any reason,
the amount of advances  made  pursuant to Sections 2.1 and such  supplement,  if
any, exceed the percentage or dollar limitations set forth in Section 2.1 and in
such supplement, as applicable, or if all of Borrower's Obligations, at any time
and for any reason,  exceed the Maximum  Credit Line (an "Over  Advance"),  then
Borrower,  upon Capital's election and demand, shall immediately pay to Capital,
in cash, the amount of such excess.

     2.2  Disbursement.   Borrower  hereby  irrevocably  authorizes  Capital  to
disburse  the  proceeds of each advance  requested,  or deemed to be  requested,
pursuant  to Section  2.1 above as follows:  (i) the  proceeds  of each  advance
requested  under Section 2.1(i) shall be disbursed by Capital in lawful money of
the United States of America in immediately  available funds, in the case of the
initial  borrowing,  in  accordance  with the terms of the written  disbursement
letter from  Borrower,  and in the case of each  subsequent  borrowing,  by wire
transfer to such bank account as may be agreed upon by Borrower and Capital from
time to time or elsewhere if pursuant to a written direction from Borrower;  and
(ii) the  proceeds of each  advance  requested  under  Section 2.1 (ii) shall be
disbursed by Capital by way of direct payment of the relevant  interest or other
Obligation.

     2.3 Payments.  The Borrower  promises to repay all Obligations  when due in
accordance  with the terms of this  Agreement or the other Loan  Documents.  All
payments with respect to any of the Obligations  shall be made to Capital on the
date when due, in U.S. Dollars ($) and in immediately  available funds,  without
any offset or counterclaim. Except where evidenced by notes or other instruments
issued or made by Borrower to Capital specifically containing payment provisions
which are in conflict  with this  Section  2.3 (in which  event the  conflicting
provisions of said notes or other  instruments  shall govern and  control),  the
Obligations shall be payable as follows:

          2.3.1  Principal.  Principal  payable on account of advances  shall be
     payable by Borrower  to Capital  immediately  upon the  earliest of (i) the
     receipt by Capital or Borrower of any proceeds of any of the Collateral, to
     the extent of said proceeds,  (ii) the occurrence of an Event of Default in
     consequence  of which Capital elects to accelerate the maturity and payment
     of the Obligations, (iii) termination of this Agreement pursuant to Section
     3 hereof; provided,  however, that if an Over Advance condition shall exist
     at any time, Borrower shall, ON DEMAND, repay the Obligations to the extent
     necessary to eliminate the Over Advance condition.

          2.3.2  Interest.  Interest  accrued on the  Advances  shall be due and
     payable on the  earliest of (i) the first (1st)  calendar day of each month
     (for the immediately  preceding month),  computed through the last calendar
     day of the preceding  month;  (ii) the occurrence of an Event of Default in
     consequence  of which Capital elects to accelerate the maturity and payment
     of the  Obligations;  and (iii)  termination of this Agreement  pursuant to
     Section 3 hereof.  At its  option,  Capital may debit such  amounts,  which
     amounts  shall  thereupon  constitute   Obligations   hereunder  and  shall
     thereafter accrue interest at the rate then provided under this Agreement.

          2.3.3  Costs,  Fees and Charges.  Capital may collect a "late  charge"
     equal to five percent (5%) of any installment of interest or principal,  or
     of any taxes,  assessments  and insurance paid by Capital which is not paid
     or reimbursed by the Borrower  within ten (10) days of the due date thereof
     to cover the extra expense  involved in handling such  delinquent  payment.
     All costs,  fees  charges and  Capital  Expenses  payable  pursuant to this
     Agreement shall be payable by Borrower as and when incurred, to Capital. At
     its option,  Capital may debit such amounts,  which amounts shall thereupon
     constitute  Obligations  hereunder and shall thereafter  accrue interest at
     the rate then provided under this Agreement.

          2.3.4 Other Obligations.  The balance of the Obligations requiring the
     payment of money,  if any,  shall be payable by  Borrower to Capital as and
     when  provided  in  this  Agreement,  if no date of  payment  is  otherwise
     specified in the Loan Documents, ON DEMAND.

          2.3.5  Interest  Rates.  All  Obligations  owed by Borrower to Capital
     shall bear interest, on the average Daily Balance owing, at a rate equal to
     the Margin (as defined on  Schedule 1) plus the Prime Rate (the  "Governing
     Rate"). Upon and after the occurrence of an Event of Default and during the
     continuation thereof, all Obligations owed by Borrower to Capital shall, at
     the election of Capital, without constituting a waiver of any such Event of
     Default,  bear interest on the average Daily Balance owing,  at the highest
     rate permitted by law. All interest  chargeable  under this Agreement shall
     be computed on the basis of a three hundred sixty (360) day year for actual
     days elapsed.

               2.3.5.1 Maximum Interest.  Regardless of any provision  contained
          in this  Agreement  or any other  agreement  or  document  executed in
          connection  herewith,  in no contingency or event whatsoever shall the
          aggregate of all amounts that are contracted for,  charged or received
          by Capital  pursuant to the terms of this  Agreement or any other Loan
          Documents and that are deemed interest under applicable law exceed the
          highest rate  permissible  under any  applicable  law. No  agreements,
          conditions,  provisions or stipulations contained in this Agreement or
          any of the other  Loan  Documents  or the  exercise  by Capital of the
          right to accelerate  the payment or the maturity of all or any portion
          of the Obligations, or the exercise of any option whatsoever contained
          in any of the Loan Documents,  or the prepayment by Borrower of any of
          the  Obligations,  or the  occurrence of any  contingency  whatsoever,
          shall entitle  Capital to charge or receive in any event,  interest or
          any charges,  amounts  premiums or fees deemed  interest by applicable
          law (such interest,  charges,  amounts,  premiums and fees referred to
          herein  collectively  as  "Interest")  in excess of the  maximum  rate
          allowable  under  applicable  law and in no event  shall  Borrower  be
          obligated  to pay  Interest  exceeding  such  maximum  rate,  and  all
          agreements, conditions or stipulations, if any, which may in any event
          or contingency whatsoever operate to bind, obligate or compel Borrower
          to pay Interest  exceeding the maximum rate allowable under applicable
          law shall be without binding force or effect,  at law or in equity, to
          the extent only of the excess of Interest  over such maximum  rate. If
          any  Interest is charged or  received  in excess of the  maximum  rate
          allowable under applicable law ("Excess"),  Borrower  acknowledges and
          stipulates  that any such charge or receipt  shall be the result of an
          accident and bona fide error, and such Excess, to the extent received,
          shall be applied  first to reduce the  principal  Obligations  and the
          balance,  if any,  returned  to  Borrower,  it being the intent of the
          parties  hereto  not to enter  into a usurious  or  otherwise  illegal
          relationship.  The  right to  accelerate  the  maturity  of any of the
          Obligations does not include the right to accelerate any interest that
          has not  otherwise  accrued  on the  date of  such  acceleration,  and
          Capital does not intend to collect any unearned  interest in the event
          of any such acceleration.  Borrower recognizes that, with fluctuations
          in the rates of interest set forth in Section 2 of this  Agreement and
          the maximum rate of interest  allowable under  applicable law, such an
          unintentional  result could  inadvertently  occur.  All monies paid to
          Capital  hereunder  or under  any other  Loan  Documents,  whether  at
          maturity or by prepayment,  shall be subject to any rebate of unearned
          interest  as and to the extent  required  by  applicable  law.  By the
          execution of this Agreement, Borrower covenants that (i) the credit or
          return of any Excess shall  constitute  the  acceptance by Borrower of
          such  Excess,  and (ii)  Borrower  shall not seek or pursue  any other
          remedy, legal or equitable, against Capital, based in whole or in part
          upon contracting for,  charging or receiving any Interest in excess of
          the maximum rate allowable  under  applicable  law. For the purpose of
          determining whether or not any Excess has been contracted for, charged
          or received  by Capital,  all  interest  at any time  contracted  for,
          charged or received from Borrower in  connection  with this  Agreement
          and any other agreement or document  executed in connection  herewith,
          any of the Loan Documents shall, to the extent permitted by applicable
          law,  be  amortized,  prorated,  allocated  and spread in equal  parts
          throughout  the full term of the  Obligations.  Borrower  and  Capital
          shall,  to the maximum  extent  permitted  under  applicable  law, (i)
          characterize any non-principal  payment as an expense,  fee or premium
          rather than as Interest and (ii) exclude voluntary prepayments and the
          effects thereof.  The provisions of this Section shall be deemed to be
          incorporated into every Loan Document (whether or not any provision of
          this  Section is referred to  therein).  All such Loan  Documents  and
          communications  relating  to any  Interest  owed by  Borrower  and all
          figures set forth therein shall, for the sole purpose of computing the
          extent of Obligations,  be automatically  recommitted by Borrower, and
          by any court  considering  the same, to give effect to the adjustments
          or credits required by this Section.

               2.3.5.2  Payment  of  Interest.  In the event that the Prime Rate
          announced is, from time to time hereafter,  changed, adjustment in the
          rate of interest payable by Borrower shall be made as of 12:01 a.m. on
          the first (1st) day of the calendar  month  following  such change and
          shall be based on the  Prime  Rate in effect as of the last day of the
          immediately preceding calendar month. All interest payable by Borrower
          shall be due and payable on the first (1st) day of each calendar month
          during the term of this  Agreement and Capital  shall,  at its option,
          charge such  interest and any and all Capital  Expenses to  Borrower's
          loan account with Capital,  which amounts shall  thereupon  constitute
          Obligations hereunder and shall thereafter accrue interest at the rate
          then provided under this Agreement.

          2.3.6 Borrowing Base Certificate and  Authorizations.  Concurrent with
     the  execution  of this  Agreement  by Borrower  and  concurrent  with each
     request for an advance pursuant to Section 2.1, but at least on once during
     each  Reporting  Period (as  defined on Schedule 1) during the term of this
     Agreement,  Borrower shall deliver to Capital a fully  completed  Borrowing
     Base  Certificate  certified  by  the  Chief  Executive  Officer  or  Chief
     Financial  Officer of Borrower as being true and correct.  Concurrent  with
     the delivery of the Borrowing  Base  Certificate,  Borrower shall provide a
     written  report to Capital of all returns  and all  material  disputes  and
     claims,  together with sales and other reports relating to the Accounts and
     Inventory as required by Capital.  If Borrower  fails to deliver to Capital
     the Borrowing Base  Certificate on the date when due, then  notwithstanding
     any of the  provisions  contained  in  Section  2.1  or in any  other  Loan
     Document to the  contrary,  Capital shall not make any advances to Borrower
     until the Borrowing Base  Certificate  is delivered to Capital.  Capital is
     hereby  authorized to make the loan and the  extensions of credit  provided
     for in this  Agreement  based upon  telecopied  or other  instructions  and
     transaction  reports  received from any one of the authorized  personnel of
     Borrower identified on Exhibit B, or, at the discretion of Capital, if such
     extensions of credit are necessary to satisfy any  Obligations  of Borrower
     to Capital.  Although  Capital shall make a reasonable  effort to determine
     the person's identity, Capital shall not be responsible for determining the
     authenticity of any such telecopied instructions and Capital may act on the
     instructions  of anyone it perceives to be one of the authorized  personnel
     identified on Exhibit B.

          2.3.7 Collections.  Borrower shall instruct all of its account debtors
     to make payments to the Lock Box. Capital or Capital's designee may, at any
     time after the  occurrence  of an event of  default,  notify  customers  or
     account debtors of Borrower that the Accounts have been assigned to Capital
     and that Capital has a security interest  therein.  Capital may at any time
     confirm the validity and/or amount of the Accounts,  collect them directly,
     and charge the  collection  costs and expenses to Borrower's  loan account,
     but,  unless and until  Capital  does so or gives  Borrower  other  written
     instructions,  the  collection of the Accounts  shall be made in accordance
     with the terms and conditions of this  Agreement.  Borrower agrees that all
     payments received by Borrower in connection with the Accounts and any other
     Collateral  shall be held in trust for Capital as  Capital's  trustee.  The
     receipt of any wire transfer of funds,  check,  or other item of payment by
     Capital shall be applied to conditionally  reduce  Borrower's  Obligations,
     but shall not be considered a payment on account  unless such wire transfer
     is of immediately  available  federal funds and is made to the  appropriate
     deposit  account of Capital or unless and until such check or other item of
     payment is honored  when  presented  for  payment.  The receipt of any wire
     transfer, check or other item of payment by Capital shall be deemed to have
     been paid to Capital  within  the  Collection  Day  Period  (as  defined on
     Schedule 1) after the date Capital  actually  receives  possession  of such
     wire transfer of funds, check or other item of payment.

          2.3.8 Monthly  Statements.  Capital shall render monthly statements of
     the Obligations owing by Borrower to Capital,  including  statements of all
     principal,  interest, and Capital Expenses owing, and such statements shall
     be  conclusively  presumed to be correct and  accurate  and  constitute  an
     account stated between Borrower and Capital unless, within thirty (30) days
     after receipt  thereof by Borrower,  Borrower shall deliver to Capital,  by
     registered or certified mail, at Capital's address indicated in Section 13,
     written objection thereto specifying the error or errors, if any, contained
     in any such statement and Capital in its good faith  discretion  determines
     such  exceptions are accurate and makes an appropriate  adjustment.  In the
     event  that  Borrower  fails  to  receive  such  monthly  statement  for  a
     particular  month,  Borrower hereby agrees and  acknowledges  that it shall
     likewise be  obligated  to notify  Capital in writing no later than 45 days
     from the end of each such month.  If Borrower fails to so notify Capital of
     same  then  said  monthly  statement  shall be deemed to have been sent and
     delivered to Borrower  and shall be final and  conclusive  on Borrower.  At
     Capital's request,  Borrower shall execute and deliver to Capital from time
     to time,  promissory  notes in form and content  satisfactory to Capital to
     evidence the balances owing in Borrower's Loan Account, but notwithstanding
     any such request for or delivery of such notes,  such statements of account
     shall be prima facie  evidence of the loans and, to the extent  intended by
     Capital  to be  included  therein,  other  Obligations  owing to Capital by
     Borrower.

          2.3.9 Fees and Reimbursement of Expenses

               A.   Fees.  Borrower  will pay to Capital those fees set forth on
                    Schedule 1.

               B.   Borrower shall  reimburse  Capital for all reasonable  costs
                    and expenses  incurred in connection with  examinations  and
                    appraisals of Borrower's books,  records and assets and such
                    other   matters  as  Capital  shall  deem   reasonable   and
                    appropriate.  The cost of such  examinations will be subject
                    to  the   limitation   contained  in  Section  4.2  of  this
                    Agreement.

               C.   If, at any time or times  regardless  of  whether  or not an
                    Event  of  Default  then  exists,  Capital  incurs  legal or
                    accounting  expenses  or any  other  costs or  out-of-pocket
                    expenses in connection with the loan  transaction  described
                    herein, including,  without limitation:  (i) the negotiation
                    and  preparation of any amendment of or modification of this
                    Agreement  or any of the  other  Loan  Documents;  (ii)  the
                    administration  of this  Agreement  or any of the other Loan
                    Documents  and  the  transactions  contemplated  hereby  and
                    thereby,   including,   without   limitation,   those  items
                    described  in  C  above;  (iii)  any  litigation,   contest,
                    dispute,  suit,  proceeding or action (whether instituted by
                    Capital;  Borrower or any other  person) in any way relating
                    to the  Collateral,  this Agreement or any of the other Loan
                    Documents or Borrower's affairs; (iv) any attempt to enforce
                    any rights of Capital  against  Borrower or any other person
                    which  may  be  obligated  to  Capital  by  virtue  of  this
                    Agreement or any of the other Loan Documents,  including any
                    account debtor or guarantor of Borrower's  Obligations;  (v)
                    any consultations regarding this Agreement or any other Loan
                    Documents  or  preparation   therefore,   or  the  financing
                    extended  hereunder or (vi) any attempt to inspect,  verify,
                    protect,  preserve,  perfect or continue the  perfection  of
                    Capital's liens upon, restore,  collect,  sell, liquidate or
                    otherwise  dispose of or realize upon the  Collateral;  then
                    all such legal and  accounting  expenses,  other  reasonable
                    costs and out-of-pocket expenses of Capital shall be charged
                    to Borrower.  All amounts  chargeable to Borrower under this
                    Section  2.3.9C shall be  Obligations  secured by all of the
                    Collateral, shall be payable on demand to Capital, and shall
                    bear  interest  from the date such demand is made until paid
                    in full at the rate  applicable  to the Daily  Balance  from
                    time to time.

               D.   Borrower  shall  pay to  Capital,  ON  DEMAND,  any  and all
                    reasonable  fees,  costs or expenses which Capital pays to a
                    bank  or  other  similar  institution  arising  out of or in
                    connection  with (i) the forwarding to Borrower or any other
                    person  or entity on behalf  of  Borrower,  by  Capital,  of
                    proceeds of advances made by Capital to Borrower pursuant to
                    this Agreement and (ii) the depositing  for  collection,  by
                    Borrower,  of any  check  or item  of  payment  received  or
                    delivered to Capital on account of the Obligations.

               E.   In the  event  of the  existence  of an  Over  Advance,  the
                    Borrower shall pay to Capital an Over Advance Fee of .0685 %
                    of the amount of the Over Advance for each day that the Over
                    Advance  is  outstanding.   Nothing  provided  herein  shall
                    constitute a consent by Capital to such Over Advance.

          2.3.10 Application of Payments and Collections.  Borrower  irrevocably
     waives  the right to direct the  application  of any and all  payments  and
     collections at any time or times  hereafter  received by Capital from or on
     behalf of Borrower, and Borrower does hereby irrevocably agree that Capital
     shall have the continuing  exclusive right to apply and reapply any and all
     such payments and  collections  received at any time or times  hereafter by
     Capital or its agent against the Obligations, in such manner as Capital may
     deem advisable.  If as the result of collections of Borrower's advances and
     Accounts a credit balance  exists in the Loan Account,  such credit balance
     shall not accrue  interest in favor of Borrower,  but shall be available to
     Borrower at any time or times for so long as no Default or Event of Default
     exists.

          2.3.11 All Advances to Constitute One  Obligation.  The advances shall
     constitute  one general  Obligation  of  Borrower,  and shall be secured by
     Capital's lien upon all of the Collateral.

          2.3.12 Loan Account.  Capital shall  establish an account on its books
     (the "Loan  Account")  and shall  enter all  advances as debits to the Loan
     Account and shall also  record in the Loan  Account  all  payments  made by
     Borrower  on any  Obligations  and all  proceeds  of  Collateral  which are
     finally  paid to  Capital,  and may  record  therein,  in  accordance  with
     customary accounting practice, other debits and credits, including interest
     and all charges and expenses properly chargeable to Borrower.

     3 TERM AND PREPAYMENT
       -------------------

     3.1 Term.

               A.   The Agreement will have a term equal to the Term.

               B.   Notwithstanding the Term, upon the occurrence of an Event of
                    Default,   Capital  may  terminate  this  Agreement  without
                    notice.  In  addition,  should  either  Capital or  Borrower
                    become  insolvent  or is  unable  to meet its  debts as they
                    mature,  then  the  other  party  shall  have  the  right to
                    terminate this Agreement at any time without notice.  On the
                    date  of  a   termination   by  Borrower  or  Capital,   all
                    Obligations shall become immediately due and payable without
                    notice or demand  and shall be paid to Capital in cash or by
                    a wire transfer of immediately available funds.

               C.   When Capital has received payment and performance in full of
                    all Obligations and an acknowledgment  from Borrower that it
                    is no longer  entitled to request any advances  from Capital
                    under this Agreement, Capital shall execute a termination of
                    all security  interests  given by Borrower to Capital,  upon
                    the execution and delivery of general  releases by Borrower,
                    any  guarantor  or  surety  of  Borrower's   Obligations  to
                    Capital.

     4 CREATION OF SECURITY INTEREST
       -----------------------------

     4.1  Grant of  Security  Interest.  Borrower  hereby  grants  to  Capital a
continuing security interest in all presently existing and hereafter acquired or
arising  Collateral  in  order  to  secure  prompt  repayment  of  any  and  all
Obligations  owed  by  Borrower  to  Capital  and  in  order  to  secure  prompt
performance by Borrower of each and all of its covenants and  obligations  under
this  Agreement  and  otherwise  created.  Capital's  security  interest  in the
Collateral  shall attach to all  Collateral  without  further act on the part of
Capital or Borrower.  In the event that any Collateral,  including proceeds,  is
evidenced by or consists of Negotiable Collateral,  Borrower shall,  immediately
upon written request therefore from Capital,  endorse and assign such Negotiable
Collateral  over to  Capital  and  deliver  actual  physical  possession  of the
Negotiable Collateral to Capital.

     4.2 Right to Examine and  Inspect.  In order to verify the  validity of any
Borrowing  Base  Certificate,  Borrower  shall,  upon the  request  of  Capital,
promptly  furnish  Capital  with copies of  Borrower's  purchase  orders,  sales
journals,   invoices,   chattel  paper,   customer's  purchase  orders,  or  the
equivalent,  and  original  shipping  or  delivery  receipts  for all  Inventory
purchased and goods sold, and Borrower shall warrant the genuineness thereof. In
addition, Capital shall be entitled to conduct from time to time during the term
of this Agreement,  examinations of Borrower's  Books,  business  operations and
Inventory  and to check  and test the same as to  quality,  quantity,  value and
condition.  Borrower  shall pay to Capital  all costs and  expenses  incurred by
Capital in  connection  with such  examinations,  including  examination  costs,
travel,   etc.,  and  the  amount  charged  shall  be  deemed  included  in  the
"Obligations"  when incurred,  and shall thereafter  accrue interest at the rate
then provided under this Agreement.

     4.3 Setoff.  All sums at any time standing to the Borrower's  credit on the
Capital's books and all of the Borrower's  property at any time in the Capital's
possession, or upon or in which Capital has a lien or security interest shall be
security for all Obligations. In addition to and not in limitation of the above,
with respect to any deposits or property of the Borrower in Capital's possession
or control, now or in the future,  Capital shall have the right to setoff all or
any portion thereof, at any time, against any Obligations hereunder, even though
unmatured, without prior notice or demand to the Borrower.

     4.4 Continuation of Security Interest.  Notwithstanding termination of this
Agreement,  until all  Obligations,  contingent  or  otherwise,  have been fully
repaid  and  performed,  Capital  shall  retain  its  security  interest  in all
presently owned and hereafter arising or acquired Collateral, and Borrower shall
continue to immediately  deliver to Capital,  in kind, all collections  received
respecting the Accounts.

     4.5 Perfection of Security Interest.  Borrower shall execute and deliver to
Capital, concurrent with Borrower's execution of this Agreement, and at any time
or  times  hereafter  at the  request  of  Capital,  all  financing  statements,
continuation   financing   statements,    security   agreements,    assignments,
endorsements,  affidavits,  reports, notices,  schedules of accounts, letters of
authority and all other documents that Capital may reasonably  request,  in form
satisfactory to Capital,  to perfect and maintain  perfected  Capital's security
interests  in the  Collateral  and  in  order  to  fully  consummate  all of the
transactions contemplated under this Agreement.

     4.6 Access to  Borrower's  Books.  Capital  (through  any of its  officers,
employees  or  agents)  shall have the  right,  at any time or times  hereafter,
during  Borrower's  usual business  hours, or during the usual business hours of
any third party  having  control  over the records of  Borrower,  to inspect and
verify  Borrower's  Books in order to verify the amount or condition  of, or any
other matter relating to, the Collateral and Borrower's financial condition.

     4.7 Power of Attorney.  Borrower hereby irrevocably makes,  constitutes and
appoints Capital (and any of Capital's officers,  employees or agents designated
by Capital) as Borrower's true and lawful attorney with power:

               A.   Upon  Borrower's  failure  or  refusal  to  comply  with its
                    undertakings  contained  in Section 4.5, to sign the name of
                    Borrower on any of the  documents  described in that section
                    or on any other similar documents which need to be executed,
                    recorded  and/or  filed  in  order to  perfect  or  continue
                    perfected Capital's security interest in the Collateral;

               B.   To   endorse   Borrower's   name  on  any   checks,   notes,
                    acceptances,  money orders, drafts or other forms of payment
                    or security that may come into Capital's possession;

               C.   To sign Borrower's  name on drafts against account  debtors,
                    on schedules  and  assignments  of  Accounts,  on notices to
                    account  debtors,  on any invoice or bill of lading relating
                    to any Account;

               D.   After the  occurrence of an Event of Default,  to notify the
                    post office  authorities  to change the address for delivery
                    of Borrower's mail to an address  designated by Capital,  to
                    receive  and open all mail  addressed  to  Borrower,  and to
                    retain all mail  relating  to the  Collateral  and  forward,
                    within two (2) business days of Capital's  receipt  thereof,
                    all other mail to Borrower;


               E.   To  send  requests  for  verification  of  Accounts,  and to
                    contact  account  debtors  in any  other  manner in order to
                    verify the Accounts.

               F.   To do all things necessary to carry out this Agreement.

     The appointment of Capital as Borrower's  attorney,  and each and every one
of Capital's rights and powers, being coupled with an interest,  are irrevocable
so long as any Accounts in which Capital has a security  interest  remain unpaid
and until  all of the  Obligations  have  been  fully  paid and  performed.  The
Borrower ratifies and approves all acts of the attorney. Neither Capital nor its
employees,  officers or agents  shall be liable for any acts or omissions or for
any error in  judgment  or mistake of fact or law made in good faith  except for
gross negligence or willful  misconduct.  Capital may file one or more financing
statements   disclosing  Capital's  security  interest  without  the  Borrower's
signature appearing thereon.

     4.8 Sale of  Inventory.  Until the  occurrence  of an Event of  Default  by
Borrower under this Agreement,  Borrower may,  subject to the provisions  hereof
and consistent herewith,  sell or lease the Inventory,  but only in the ordinary
course  of  Borrower's  business.  A sale or lease of  Inventory  in  Borrower's
ordinary  course of  business  does not  include an  exchange  or a transfer  in
partial or total  satisfaction of a debt owing by Borrower,  nor does it include
an exchange for less than reasonably equivalent value.

     5 CONDITIONS PRECEDENT AND SUBSEQUENT
       -----------------------------------

     5.1  Conditions  Precedent.  As  conditions  precedent  to any  advances by
Capital  hereunder  or any other Loan  Documents,  Borrower  shall  execute  and
deliver,  or  cause  to be  executed  and  delivered,  to  Capital,  in form and
substance satisfactory to Capital and its counsel, the following:

               A.   Financing  statements (form UCC-1) in form  satisfactory for
                    filing  and  recording  with  the  appropriate  governmental
                    authorities.

               B.   Certified  extracts  from the  minutes  of the  meetings  of
                    Borrower's  members   authorizing  the  borrowings  and  the
                    granting of the  security  interest  provided for herein and
                    authorizing  specific  officers  to execute  and deliver the
                    agreements provided for herein.

               C.   A certified copy of Borrower's  Certificate of Formation and
                    any  amendments  thereto,  a  certificate  of good  standing
                    showing that Borrower is in good standing  under the laws of
                    the State of its formation and certificates  indicating that
                    Borrower has  qualified to transact  business and is in good
                    standing  in any  other  state in which the  conduct  of its
                    business or its ownership of property requires that it be so
                    qualified.

               D.   UCC searches,  tax lien and litigation searches,  fictitious
                    business statement filings, insurance certificates,  notices
                    or other similar  documents which Capital may require and in
                    such  form as  Capital  may  require,  in order to  reflect,
                    perfect  or  protect  the  priority  of  Capital's  security
                    interests in the Collateral and in order to fully consummate
                    all of the transactions contemplated under this Agreement.

               E.   Prior to any funding requested hereunder,  a fully completed
                    Borrowing  Base  Certificate,  dated  as of the  date of any
                    requested  funding,  and certified as being true and correct
                    by the Chief Executive Officer or Chief Financial Officer.

               F.   A separate guaranty,  in a form acceptable to Capital in its
                    sole discretion,  duly executed and delivered by each of the
                    Guarantors, respectively, to Capital.

               G.   Evidence  satisfactory to Capital that Borrower has obtained
                    insurance  policies or binders,  with such  insurers  and in
                    such amounts as may be acceptable to Capital, respecting the
                    tangible  personal  property  comprising  the Collateral and
                    naming  Capital  as a loss  payee on a  lender's  loss payee
                    endorsement acceptable to Capital in its sole discretion.

               H.   Evidence  satisfactory  to Capital that Borrower has,  after
                    request  from  Capital,   obtained   business   interruption
                    insurance  and  any   insurance   maintained  on  Borrower's
                    Accounts,  with such  insurers and in such amounts as may be
                    acceptable to Capital, covering and naming Capital as a loss
                    payee on a lender's  loss payee  endorsement  acceptable  to
                    Capital in its sole discretion.

               I.   Evidence  satisfactory to Capital,  in its sole  discretion,
                    that   Borrower  has  recorded   fictitious   business  name
                    statements in the appropriate governmental offices regarding
                    all of the trade names used by Borrower in its business.

               J.   The Loan Documents.

               K.   A legal opinion from Borrower's  outside counsel in form and
                    content acceptable to Capital.

               L.   Separate subordination  agreements,  in a form acceptable to
                    Capital in its sole discretion,  duly executed and delivered
                    by each Subordinating Creditor, respectively, to Capital, if
                    applicable.

               M.   Landlord Waivers for all of Borrower's leased locations.

               N.   Copies  of  Borrower's  most  recent  quarterly  and  annual
                    statements filed with the Securities and Exchange Commission
                    ("SEC").

               O.   Such other matters set forth on Schedule 1.

     6. BORROWER'S REPRESENTATIONS AND WARRANTIES
        -----------------------------------------

     Borrower makes the following  representations and warranties which shall be
deemed to be  continuing  representations  and  warranties so long as any credit
hereunder shall be available and until the Obligations have been repaid in full:

     6.1 Existence and Rights.

               A.   The chief  executive  office of  Borrower  is at the address
                    specified on Schedule 1;

               B.   Borrower is an entity described on Schedule 1 duly organized
                    and  existing  under the laws of the State of  Incorporation
                    (as defined on Schedule 1) and is qualified  and licensed to
                    do  business  and is in good  standing in any state in which
                    the  conduct of its  business or its  ownership  of property
                    requires that it be so qualified;

               C.   Borrower  has  the  right  and  power  to  enter  into  this
                    Agreement and each of the other Loan Documents;

               D.   Borrower has the power, authority,  rights and franchises to
                    own  its  property  and  to  carry  on its  business  as now
                    conducted;

               E.   Borrower has no investment in any other business entity.

     6.2  Agreement  Authorized.  The  execution,  delivery and  performance  by
Borrower of this Agreement and each of the other Loan  Documents:  (a) have been
duly  authorized and do not require the consent or approval of any  governmental
body or other regulatory authority; and (b) shall not constitute a breach of any
provision contained in Borrower's Articles of Incorporation or Bylaws.

     6.3 Binding  Agreement.  This  Agreement is the valid,  binding and legally
enforceable obligation of Borrower in accordance with its terms.

     6.4 No Conflict.  The  execution,  delivery and  performance by Borrower of
this Agreement and each of the other Loan Documents: (a) shall not constitute an
event of  default  under  any  agreement,  indenture  or  undertakings  to which
Borrower  is a party  or by  which  it or any of its  property  may be  bound or
affected;  (b)  are  not in  contravention  of or in  conflict  with  any law or
regulation;  and (c) do not cause any lien,  charge or other  encumbrance  to be
created or  imposed  upon any such  property  by reason  thereof  other than the
security interests granted to Capital in the Collateral.

     6.5  Litigation.  Except as set forth on Exhibit C, there are no actions or
proceedings  pending by or against  Borrower or any guarantor of Borrower before
any court or administrative  agency,  and Borrower has no knowledge or belief of
any pending,  threatened or imminent litigation,  governmental investigations or
claims, complaints,  actions or prosecutions involving Borrower or any guarantor
of  Borrower,  except for ongoing  collection  matters in which  Borrower is the
plaintiff and except as heretofore disclosed,  in writing, to Capital.  Borrower
is not in default with respect to any order, writ, injunction,  decree or demand
of any court or any governmental or regulatory authority.

     6.6 Financial Condition.  All financial statements and information relating
to Borrower  which have been delivered by Borrower to Capital have been prepared
in  accordance  with  GAAP,  unless  otherwise  stated  therein,  and fairly and
reasonably present Borrower's  financial  condition.  There has been no material
adverse change in the financial condition of Borrower since the date of the most
recent of such  financial  statements  submitted  to  Capital.  Borrower  has no
knowledge of any liabilities,  contingent or otherwise,  which are not reflected
in such financial statements and information,  and Borrower has not entered into
any special  commitments or contracts  which are not reflected in such financial
statements  or  information  which may have a  materially  adverse  effect  upon
Borrower's financial condition, operations or business as now conducted.

     6.7 Tax Status.  Borrower has no liability for any delinquent state,  local
or federal taxes.

     6.8 Title to Assets. Borrower has good title to its assets and the same are
not subject to any liens or  encumbrances  other than those permitted by Section
6.11A.

     6.9 Trademarks and Patents.  Borrower, as of the date hereof, possesses all
necessary  trademarks,  trade  names,  copyrights,  patents,  patent  rights and
licenses to conduct its  business as now  operated,  without any known  conflict
with the valid trademarks,  trade names, copyrights,  patents and license rights
of others.

     6.10  Environmental  Quality.  Borrower has in the past and is currently in
compliance  with  any and all  federal,  state  and  local  statutes,  laws  and
regulations  concerning  the  preservation  of the  environment  and the use and
disposal of hazardous and toxic materials and substances.  Borrower is not aware
that it is under  investigation  by any  state or  federal  agency  designed  to
enforce any of such laws or regulations.

     6.11 Accounts, General Intangibles and Negotiable Collateral.

               A.   Borrower has good and marketable title to the Accounts,  the
                    General Intangibles and the Negotiable Collateral,  free and
                    clear of liens, claims,  security interests, or encumbrances
                    (except   as  held  by   Capital,   and  except  as  may  be
                    specifically  consented  to, in advance and in  writing,  by
                    Capital);  at the time of their  assignment  to Capital  the
                    Accounts will be bona fide existing  obligations  created by
                    the sale or lease of goods or the  rendition  of services to
                    account debtors in the ordinary and usual course of business
                    and will be owed to  Borrower  without  any known  defenses,
                    disputes, offsets or counterclaims,  or any rights of return
                    or  cancellation;  Borrower shall have received no notice of
                    actual or imminent  bankruptcy  or insolvency of any account
                    debtor at the time the Account due from such account  debtor
                    is created;  and in accordance with prudent credit policies,
                    the account debtor shall be able to timely  discharge all of
                    its indebtedness to Borrower;

               B.   Borrower shall deliver to Capital,  as Capital may from time
                    to time  require,  original  delivery  receipts,  customer's
                    purchase orders, shipping instructions,  bills of lading and
                    other  documentation  respecting  shipment  arrangements  as
                    applicable  to each  purchase  by  Borrower  of an  Account.
                    Absent  such a  request  by  Capital,  copies  of  all  such
                    documentation  shall be held by  Borrower as  custodian  for
                    Capital;

               C.   At the time each  Eligible  Account is  assigned to Capital,
                    such Eligible  Account will be due and payable in accordance
                    with the terms set forth in Section  1.14,  or on such other
                    terms  approved,  in  writing,  by Capital in advance of the
                    creation of such Account,  and such terms shall be expressly
                    set forth on the face of the  invoice for such  Account.  No
                    Eligible Account will be past due at the time it is assigned
                    to Capital.

     6.12 Inventory and Equipment.


               A.   The Inventory  and  Equipment are currently  located only at
                    the locations identified on Exhibit E ;


               B.   All Inventory is now and at all times  hereafter shall be of
                    good and merchantable quality, free from defects;

               C.   The  Inventory  and Equipment are and shall remain free from
                    all liens,  claims,  encumbrances,  and  security  interests
                    (except   as  held  by   Capital,   and  except  as  may  be
                    specifically  consented,  in  advance  and  in  writing,  by
                    Capital);

               D.   The Inventory is not now stored with a bailee,  warehouseman
                    or similar party; and

               E.   Borrower   currently  keeps  correct  and  accurate  records
                    itemizing  and  describing  the  kind,  type,   quality  and
                    quantity of the Inventory, and its cost therefore.

     6.13 Brokers There has been no mortgage or loan broker in  connection  with
this loan  transaction  other than as set forth on Schedule 1, and the  Borrower
agrees to indemnify and hold the Lender  harmless from any claim of compensation
payable to any mortgage or loan broker in connection with this loan transaction.

     7 BORROWER'S AFFIRMATIVE COVENANTS
       --------------------------------

     Borrower covenants and agrees that so long as any credit hereunder shall be
available and until the  Obligations  have been repaid in full,  unless  Capital
shall otherwise consent in writing, Borrower shall do all of the following:

     7.1 Assignment  Schedules and Invoices.  At the time of each  assignment of
Accounts to  Capital,  Borrower  shall  deliver to  Capital:  (1) an  assignment
schedule  of  all  Accounts  created  by  Borrower  since  the  delivery  of the
immediately  preceding  assignment  schedule required  hereunder;  (2) copies of
invoices  evidencing  such sales and  shipping  evidence  or proofs of  delivery
relating thereto as applicable to each sale which results in an Account; (3) for
all invoices in the amount of $5,000 or more generated by the Borrower resulting
from drop shipments, copies of invoices and shipping evidence from the seller of
such goods to the  Borrower;  and (4) such other  documentation  as Capital  may
request  from time to time  including  but not  limited to  Borrower's  proof of
verification on each purchased invoice.

     7.2 Rights and Facilities. Borrower shall maintain and preserve all rights,
franchises  and  other  authority  adequate  for the  conduct  of its  business.
Borrower  shall also maintain its  properties,  equipment and facilities in good
order and repair and conduct its business in an orderly manner without voluntary
interruption and maintain and preserve its existence.

     7.3 Location of Inventory and Equipment.  The Inventory and Equipment shall
be located  only at  locations  listed on Exhibit E or such other  locations  as
shall have been approved by Capital.

     7.4 Inventory  Records.  Borrower  shall keep correct and accurate  records
itemizing and describing the kind, type,  quality and quantity of the Inventory,
and its cost thereof, all of which records shall be available upon demand to any
of Capital's officers, agents and employees for inspection and copying.

     7.5 Insurance. Borrower, at its expense, shall keep and maintain its assets
insured  against loss or damage by fire,  theft,  explosion,  sprinklers and all
other hazards and risks ordinarily  insured against by other owners who use such
properties in similar businesses for the full insurable value thereof.  Borrower
shall  deliver to Capital  certified  copies of such  policies of insurance  and
evidence of the payments of all premiums therefore. Borrower shall also keep and
maintain business interruption,  public liability, and property damage insurance
relating to Borrower's ownership and use of the Inventory, the Equipment and its
other assets.  All such policies of insurance  shall be in such form,  with such
companies,  and in such  amounts as may be  satisfactory  to  Capital.  All such
policies of insurance  (except those of public  liability  and property  damage)
shall contain an endorsement in a form  satisfactory  to Capital showing Capital
as a loss payee thereof, and all proceeds payable thereunder shall be payable to
Capital  and,  upon  receipt  by  Capital,  shall be  applied  on account of the
Obligations owing to Capital. To secure the payment of the Obligations, Borrower
grants  Capital a security  interest in and to all such  policies  of  insurance
(except those of public liability and property damage) and the proceeds thereof,
and Borrower  shall direct all insurers  under such policies of insurance to pay
all proceeds thereof directly to Capital.

     7.6 Notice of Litigation.  If at any time during the term of this Agreement
any litigation,  governmental  investigations or claims, complaints,  actions or
prosecutions  involving Borrower or any guarantor of Borrower shall be commenced
or  threatened,  Borrower  shall  immediately  notify Capital in writing of such
event.

     7.7 Submission of Records and Reports.


               A.   Borrower  shall  execute and  deliver to Capital  within ten
                    (10) days  after the end of each  month  during  the term of
                    this Agreement,  reflecting the status as of the end of each
                    month,  certified  by the Chief  Executive  Officer or Chief
                    Operating Officer of Borrower as being true and correct, (i)
                    a  current  detailed  aging,  by total and by  customer,  of
                    Borrower's Accounts, (ii) a current detailed aging, by total
                    and by vendor,  of Borrower's  accounts  payable and (iii) a
                    Compliance  Certificate  in the form of  Exhibit  D from the
                    Chief  Executive  Officer  or  Chief  Operating  Officer  of
                    Borrower  certifying  that no  Event  of  Default  currently
                    exists under this Agreement, all of which shall be set forth
                    in  a  form  and  shall  contain  such   information  as  is
                    acceptable to Capital;

               B.   Borrower  shall  promptly  supply  Capital  with such  other
                    information  concerning  its  affairs as Capital may request
                    from  time to time  hereafter,  and  shall  promptly  notify
                    Capital  of  any  material   adverse  change  in  Borrower's
                    financial  condition  and of any  condition  or event  which
                    constitutes  a breach of, or an event which  constitutes  an
                    Event of Default under, this Agreement.

     7.8 Taxes. All assessments and taxes,  whether real, personal or otherwise,
due or payable by, or imposed, levied or assessed against Borrower or any of its
property shall be paid in full,  before  delinquency or before the expiration of
any extension  period.  Borrower shall make due and timely payment or deposit of
all federal, state and local taxes,  assessments or contributions required of it
by law,  and will  execute  and  deliver  to  Capital,  on  demand,  appropriate
certificates  attesting to the payment or deposit  thereof.  Borrower  will make
timely  payment  or deposit  of all  F.I.C.A.  payments  and  withholding  taxes
required  of  it by  applicable  laws,  and  will  furnish  Capital  with  proof
satisfactory  to Capital  indicating  that  Borrower  has made such  payments or
deposits.

     7.9 Financial Statements.

               A.   Borrower  shall  maintain  a standard  and modern  system of
                    accounting in  accordance  with GAAP with ledger and account
                    cards and/or computer tapes, discs,  printouts,  and records
                    pertaining to the  Collateral  which contain  information as
                    may from  time to time be  requested  by  Capital.  Borrower
                    shall not modify or change its method of accounting or enter
                    into, modify or terminate any agreement  presently existing,
                    or at any time  hereafter  entered into with any third party
                    accounting  firm and/or service  bureau for the  preparation
                    and/or storage of Borrower's accounting records without said
                    accounting firm and/or service bureau agreeing to provide to
                    Capital information  regarding the Collateral and Borrower's
                    financial  condition.  Borrower agrees to permit Capital and
                    any of its  employees,  officers  or  agents,  upon  demand,
                    during   Borrower's  usual  business  hours,  or  the  usual
                    business hours of third persons having control  thereof,  to
                    have access to and examine all of Borrower's  Books relating
                    to the Collateral,  the  Obligations,  Borrower's  financial
                    condition and the results of Borrower's operations,  and, in
                    connection  therewith,  permit Capital or any of its agents,
                    employees or officers to copy and make extracts therefrom.

               B.   For each of Borrower's  fiscal years during the term of this
                    Agreement, Borrower shall deliver to Capital:

                    (i)  within the  Monthly  Reporting  Period  (as  defined on
                         Schedule 1), a statement of the financial  condition of
                         Borrower for such monthly period on a Monthly Reporting
                         Level (as defined on Schedule  1),  including,  but not
                         limited  to,  a  balance   sheet,  a  profit  and  loss
                         statement,  and a cash  flow  statement,  and any other
                         report  requested by Capital relating to the Collateral
                         and  the  financial   condition  of  Borrower,   and  a
                         certificate  signed by the Chief  Executive  Officer or
                         Chief Operating Officer of Borrower, to the effect that
                         all  statements  and reports  delivered or caused to be
                         delivered to Capital under this subsection,  fairly and
                         thoroughly present the financial condition of Borrower,
                         are  true  and  correct  as of  the  last  day  of  the
                         immediately  preceding  calendar  month and that  there
                         exists on the date of delivery to Capital no  condition
                         or event which  constitutes  an Event of Default  under
                         this  Agreement or which,  with the giving of notice or
                         the passage of time or both,  would constitute an Event
                         of Default under this Agreement;

                    (ii) within  the  Annual  Reporting  Period  (as  defined on
                         Schedule 1), a statement of the financial  condition of
                         Borrower for such fiscal year,  on an Annual  Reporting
                         Level (as defined on Schedule 1) basis, including,  but
                         not  limited  to, a balance  sheet,  a profit  and loss
                         statement,  and a cash  flow  statement,  and any other
                         report  requested by Capital relating to the Collateral
                         and  the  financial   condition  of  Borrower,   and  a
                         certificate  signed by the Chief  Executive  Officer or
                         Chief Operating Officer of Borrower, to the effect that
                         all reports,  statements,  computer disc or tape files,
                         printouts, runs, or other computer prepared information
                         of any kind or  nature  relating  to the  foregoing  or
                         documents  delivered  or  caused  to  be  delivered  to
                         Capital under this  subsection,  fairly and  thoroughly
                         present the  financial  condition  of Borrower and that
                         there  exists on the date of  delivery  to  Capital  no
                         condition  or  event  which  constitutes  an  Event  of
                         Default under this Agreement or which,  with the giving
                         of  notice  or the  passage  of  time  or  both,  would
                         constitute an Event of Default under this Agreement.


     7.10 Financial  Covenants.  Borrower shall maintain at all times during the
term of this Agreement the Financial Covenants set forth on Schedule 1.

     7.11 Tax  Returns.  Borrower  shall  deliver to  Capital  copies of each of
Borrower's  future  federal and state  income tax  returns,  and any  amendments
thereto, within fifteen (15) calendar days following the filing thereof with the
Internal  Revenue  Service  and with the  appropriate  state  offices.  Upon the
written  request of Capital,  Borrower  further  agrees to  promptly  deliver to
Capital copies of all receipts issued to Borrower for the payment of federal and
state withholding taxes required of it.

     7.12 Payment of Debts. Borrower shall be at all times hereafter solvent and
able to pay its debts (including trade debts) as they mature.

     7.13 Compliance with Environmental Laws. Borrower shall comply with any and
all federal,  state and local  statutes,  laws and  regulations  concerning  the
preservation  of the environment and the use and disposal of hazardous and toxic
materials and substances.

     7.14  Reimbursement  for  Capital  Expenses.  Upon the  demand of  Capital,
Borrower shall  immediately  reimburse  Capital for all sums expended by Capital
which constitute  Capital Expenses,  and Borrower hereby authorizes and approves
all advances and payments by Capital for items constituting Capital Expenses.

     8 BORROWER'S NEGATIVE COVENANTS
       -----------------------------

     Borrower covenants and agrees that so long as any credit hereunder shall be
available and until the  Obligations  have been repaid in full,  unless  Capital
shall otherwise consent in writing, Borrower shall not do any of the following:

     8.1 Relocate of Chief Executive  Office.  Borrower will not, without thirty
(30) days prior written  notification  to Capital,  relocate its chief executive
office.

     8.2 Agreements with Account Debtors.  After an Event of Default  hereunder,
no  discount,  credit or  allowance  shall be granted by Borrower to any account
debtor  and no return of  merchandise  shall be  accepted  by  Borrower  without
Capital's  consent.  Capital  may,  after an Event of Default,  settle or adjust
disputes and claims  directly  with  account  debtors for amounts and upon terms
which  Capital  considers  advisable,  and in such  cases,  Capital  will credit
Borrower's  account with only the net amounts  received by Capital in payment of
such  disputed  Accounts,  after  deducting  all  Capital  Expenses  incurred or
expended in connection therewith.

     8.3  Storage of  Inventory.  The  Inventory  shall not at any time or times
hereafter  be stored  with a  bailee,  warehouseman  or  similar  party  without
Capital's prior written consent,  and, in such event,  Borrower will, concurrent
therewith,  cause any such bailee,  warehouseman  or similar  party to issue and
deliver to  Capital,  in a form  acceptable  to Capital,  warehouse  receipts in
Capital's name evidencing the storage of the Inventory.

     8.4  Business  Structure  and  Operations.   Borrower  shall  not,  without
Capital's prior written consent:

                    A.   Sell,  lease, or otherwise  dispose of, move,  relocate
                         (except in  connection  with a relocation of Borrower's
                         business  facility)  or  transfer,  whether  by sale or
                         otherwise,  any of Borrower's  assets,  except sales of
                         Inventory   in  the   ordinary   and  usual  course  of
                         Borrower's business as presently conducted;

                    B.   Change  Borrower's  name or form of entity,  or add any
                         new fictitious name;

                    C.   Acquire,  merge or  consolidate  with or into any other
                         business organization;

                    D.   Enter  into any  transaction  not in the  ordinary  and
                         usual course of Borrower's business;

                    E.   Guarantee  or  otherwise  become in any way liable with
                         respect to the obligations of any third party except by
                         endorsement  of  instruments  or items of  payment  for
                         deposit to the general account of Borrower or which are
                         transmitted or turned over to Capital;

                    F.   Make any change in the Borrower's  financial  structure
                         or in any  of  its  business  objectives,  purposes  or
                         operations  which could adversely affect the ability of
                         Borrower to repay the Obligations;

                    G.   Incur any debts  outside the  ordinary and usual course
                         of Borrower's business;

                    H.   Make any advance or loan to any person or entity;

                    I.   Prepay  any  existing  indebtedness  owing to any third
                         party;

                    J.   Cause, permit or suffer any change, direct or indirect,
                         in Borrower's capital ownership;


                    K.   Make any  distribution  or declare or pay any dividends
                         (in cash or in stock) on, or purchase,  acquire, redeem
                         or  retire  any  of its  common  stock,  of any  class,
                         whether now or hereafter outstanding;

                    L.   Suspend or go out of business;

                    M.   Pay total  compensation to officers of Borrower (or any
                         of their relatives),  including salaries,  withdrawals,
                         fees, bonuses, commissions,  drawing accounts and other
                         payments,  whether directly or indirectly,  in money or
                         otherwise,  during  the each  fiscal  year of  Borrower
                         during  the  term of  this  Agreement  in an  aggregate
                         amount for all such  officers  in excess of one hundred
                         and fifty percent  (150%) such amounts in effect on the
                         date hereof;

                    N.   Make any loans,  advances,  intercompany  transfers  or
                         cash flow  between  the  Borrower  and any  subsidiary,
                         related entity or affiliate of the Borrower or with any
                         company that has common  officers or directors with the
                         Borrower.

     8.5 ERISA.


                    A.   If applicable,  no employee benefit plan established or
                         maintained by the Borrower (including any multiemployer
                         plan  to  which  the  Borrower  contributes)  which  is
                         subject to Part 3 of Subtitle B or Title I of ERISA had
                         a material accumulated funding deficiency (as such term
                         is defined in Section  302 of ERISA) as of the last day
                         of the most recent fiscal year of such plan ended prior
                         to the date  hereof,  or would have had an  accumulated
                         funding  deficiency (as so defined) on such day if such
                         year were the first  year of such plan to which  Part 3
                         of  Subtitle  B of  Title I of  ERISA  applied,  and no
                         material  liability  to the  Pension  Benefit  Guaranty
                         Corporation, has been or is expected by the Borrower to
                         be,  incurred  with  respect  to any  such  plan by the
                         Borrower.

                    B.   The Borrower is not required to contribute to or is not
                         contributing to a "Multiemployer Pension Plan" (as such
                         term  is  defined  in the  Multiemployer  Pension  Plan
                         Amendments   Act  of  l980).   The   Borrower   has  no
                         "withdrawal liability" (as also defined in such Act) to
                         any multiemployer  pension plan, nor has any reportable
                         event  referred to in section  4043(b) of the  Employee
                         Retirement   Income  Security  Act  of  1974  ("ERISA")
                         occurred that has resulted or could result in liability
                         of the  Borrower;  and the  Borrower  does not have any
                         reason to  believe  that any other  event has  occurred
                         that has  resulted or could  result in liability of the
                         Borrower as set forth above.

                    C.   Borrower  shall not  withdraw  from  participation  in,
                         permit the  termination or partial  termination  of, or
                         permit the  occurrence  of any other event with respect
                         to any deferred  compensation  plan  maintained for the
                         benefit of  Borrower's  employees  under  circumstances
                         that could result in  liability to the Pension  Benefit
                         Guaranty  Corporation,  or  any of  its  successors  or
                         assigns, or to any entity which provides funds for such
                         deferred compensation plan.

                    D.   Borrower  shall not  withdraw  from any  multi-employer
                         plan  described  in Section  4001(a)(3)  of ERISA which
                         covers Borrower's employees.

     9. EVENTS OF DEFAULT
        -----------------

     Any one or more of the  following  events  shall  constitute  an  Event  of
Default by Borrower under this Agreement:

     9.1  Failure  to Pay  Obligations.  If  Borrower  fails to pay when due and
payable or when  declared due and payable all or any portion of the  Obligations
owing  to  Capital  (whether  of  principal,  taxes,  reimbursement  of  Capital
Expenses, or otherwise);

     9.2 Failure to Perform.  If Borrower fails or neglects to perform,  keep or
observe  any  term,  provision,  condition,  covenant,  agreement,  warranty  or
representation  contained in this Agreement, in any of the other Loan Documents,
or in any other present or future agreement between Borrower and Capital;

     9.3 Inaccurate Information.  If any representation,  statement,  report, or
certificate made or delivered by Borrower, or any of its officers,  employees or
agents, to Capital is not true and correct, in any material respect,  including,
but not limited to, any Borrowing Base Certificate delivered to Capital pursuant
to this Agreement;

     9.4 Third Party Claim.  If all or a material  portion of Borrower's  assets
are attached,  seized,  subjected to a writ or distress  warrant,  or are levied
upon, or come into the possession of any Judicial Officer or Assignee;

     9.5  Impairment.  If there is a  material  impairment  of the  prospect  of
repayment  of all or any  portion  of the  Obligations  owing  to  Capital  or a
material  impairment of the value or priority of Capital's security interests in
the Collateral;

     9.6  Voluntary  Insolvency  Proceeding.  If  an  Insolvency  Proceeding  is
commenced by Borrower;


     9.7  Involuntary  Insolvency  Proceeding.  If an  Insolvency  Proceeding is
commenced against Borrower;

     9.8 Interruption of Business. If Borrower is enjoined, restrained or in any
way prevented by court order from continuing to conduct all or any material part
of its business affairs;

     9.9 Governmental  Lien. If a notice of lien, levy or assessment is filed of
record  with  respect to any or all of  Borrower's  assets by the United  States
Government,  or any department,  agency or  instrumentality  thereof,  or by any
state,  county,  municipal or other  governmental  agency, or if any tax or debt
owing at any time hereafter to any one or more of such entities  becomes a lien,
whether choate or otherwise,  upon any or all of the  Borrower's  assets and the
same is not paid on the payment date thereof;

     9.10 Liens. If a judgment or other claim becomes a lien or encumbrance upon
all or a material portion of Borrower's assets;

     9.11 Default in Agreement  with Third Party.  If there is a default,  after
the expiration of all applicable cure periods, in any loan agreement,  mortgage,
indenture or other  material  agreement to which  Borrower is a party with third
parties,  and  Capital  determines  that such  default  shall have a  materially
adverse  effect on  Borrower's  business or the  prospects  for repayment of the
Obligations;

     9.12 Misrepresentation. If any misrepresentation exists now or hereafter in
any  warranty  or  representation  made to Capital by Borrower or any officer or
director of Borrower,  or if any such warranty or representation is withdrawn by
Borrower or by any officer or director of Borrower;

     9.13 Impairment of Guaranty. If any guarantor of Borrower's indebtedness to
Capital dies, terminates its guaranty, defaults in the payment or performance of
any  obligations  of  guarantor  owing to Capital,  or becomes the subject of an
Insolvency Proceeding;

     9.14 Reportable Event Under ERISA. If any reportable  event,  which Capital
determines,  in its sole and absolute  discretion,  will have a material adverse
effect on the  financial  condition  of  Borrower  or which  Capital  determines
constitutes grounds for the termination of any deferred compensation plan by the
Pension Benefit  Guaranty  Corporation or for the appointment by the appropriate
United States  District  Court of a trustee to administer  any such plan,  shall
have  occurred and be continuing  thirty (30) days after written  notice of such
determination  shall have been given to Borrower  by  Capital,  or any such Plan
shall be terminated  within the meaning of Title IV of ERISA, or a trustee shall
be appointed by the  appropriate  United States District Court to administer any
such  plan,  or  the  Pension  Benefit  Guaranty   Corporation  shall  institute
proceedings  to  terminate  any plan and in case of any event  described in this
Section 9.14, the aggregate  amount of the  Borrower's  liability to the Pension
Benefit  Guaranty  Corporation  under Sections 4062, 4063 or 4064 of ERISA shall
exceed five percent (5%) of Borrower's Tangible Net Worth; or

     9.15 Withdrawal  from  Multi-Employer  Plan.  Borrower shall have withdrawn
from a multi-employer  plan described in Section  4001(a)(3) of ERISA and incurs
withdrawal liability as a result thereof.

     9.16  Termination  of Employment of  Guarantors.  If any one or more of the
Guarantors  cease to be employed by the Borrower in capacities  similar to those
in effect as of the date of this Agreement.

     9.17  Payment  on  Subordinated  Debt.  If  Borrower  makes any  payment on
Subordinated  Debt, if existing,  in violation of the  applicable  Subordination
Agreement.

     10 CAPITAL'S RIGHTS AND REMEDIES

     10.1 Remedies. Upon the occurrence of an Event of Default by Borrower under
this Agreement, Capital may, at its election, without notice of its election and
without demand, do any one or more of the following, all of which are authorized
by Borrower:

                    A.   Declare all  Obligations,  whether arising  pursuant to
                         this  Agreement  or  otherwise,   immediately  due  and
                         payable;

                    B.   Cease advancing money or extending credit to or for the
                         benefit of Borrower  under this  Agreement or under any
                         other agreement between Borrower and Capital;

                    C.   Terminate  this  Agreement  and any of the  other  Loan
                         Documents as to any future  liability or  obligation of
                         Capital,  but without  affecting  Capital's  rights and
                         security   interest  in  the   Collateral  and  without
                         affecting the Obligations owing by Borrower to Capital;

                    D.   Capital or  Capital's  designee  may notify  customers,
                         account   debtors  or  lessees  of  Borrower  that  the
                         Accounts have been assigned to Capital and that Capital
                         has a security interest therein, collect them directly,
                         and  charge  the  collection   costs  and  expenses  to
                         Borrower's loan account;

                    E.   Without  notice  to or  demand  upon  Borrower  or  any
                         Guarantor,  make  such  payments  and do  such  acts as
                         Capital  considers  necessary or  reasonable to protect
                         its  security  interest  in  the  Collateral.  Borrower
                         agrees  to  assemble  the   Collateral  if  Capital  so
                         requires,  and to  make  the  Collateral  available  to
                         Capital as Capital may designate.  Borrower  authorizes
                         Capital to enter the premises  where the  Collateral is
                         located,   take   and   maintain   possession   of  the
                         Collateral,  or any part of it,  and to pay,  purchase,
                         contest or compromise any  encumbrance,  charge or lien
                         which in the opinion of Capital  appears to be prior or
                         superior  to its  security  interest  and  to  pay  all
                         expenses incurred in connection therewith;

                    F.   Capital is hereby  granted a license or other  right to
                         use,  without  charge,   Borrower's  labels,   patents,
                         copyrights,  rights of use of any name,  trade secrets,
                         trade names,  trademarks and advertising matter, or any
                         property  of a similar  nature,  as it  pertains to the
                         Collateral,  in completing  production of,  advertising
                         for sale and  selling  any  Collateral  and  Borrower's
                         rights under all licenses, and all franchise agreements
                         shall insure to Capital's benefit;

                    G.   Ship,  reclaim,   recover,  store,  finish,   maintain,
                         repair,  prepare for sale,  advertise for sale and sell
                         (in the manner provided for herein) the Collateral;

                    H.   Sell the Collateral at either a public or private sale,
                         or  both,   by  way  of  one  or  more   contracts   or
                         transactions, for cash or on terms. It is not necessary
                         that the Collateral be present at any such sale;

                    I.   In  connection  with any such  sale,  the  standard  of
                         commercial  reasonableness  will be deemed satisfied if
                         Capital does the following:

                    (i)  Location of Sale(s).  The sale(s) may be  conducted  at
                         Borrower's premises,  Capital's premises,  the premises
                         of any third party located in or adjacent to any county
                         in which any of the collateral is located, or any other
                         location   which   Capital   believes   is   reasonably
                         convenient  to potential  purchasers.  The selection of
                         any such location(s)  shall be in the sole and absolute
                         discretion of Capital.

                    (ii) Notice  of  Sale.  Capital  shall  give  notice  of the
                         disposition of the  Collateral as follows:

                         (a) Capital  shall give  Borrower  and each holder of a
                    security  interest  in the  Collateral  who has  filed  with
                    Capital a written request for notice, a notice in writing of
                    the time and  place of  public  sale,  or,  if the sale is a
                    private sale or some other  disposition  other than a public
                    sale is to be made of the  Collateral,  the time on or after
                    which the private sale or other disposition is to be made;

                         (b) The notice shall be personally delivered or mailed,
                    postage  prepaid,  to Borrower as provided in Section 13, at
                    least ten (10)  calendar  days before the date fixed for the
                    sale,  or at least ten (10) calendar days before the date on
                    or after which the private sale or other  disposition  is to
                    be made, unless the Collateral is perishable or threatens to
                    decline  speedily  in value.  Notice to  persons  other than
                    Borrower  claiming an interest  in the  Collateral  shall be
                    sent to such addresses as they have furnished to Capital;

                         (c) If the sale is to be a public sale,  Capital  shall
                    also  give  notice  of the time and  place by  publishing  a
                    notice one time at least ten (10)  calendar  days before the
                    date of the sale in a newspaper  of general  circulation  in
                    the county in which the sale is to be held;

                    J.   Capital may credit bid and purchase at any public sale;

                    K.   Borrower  shall pay all  Capital  Expenses  incurred in
                         connection  with Capital's  enforcement and exercise of
                         any of its  rights  and  remedies  as herein  provided,
                         whether or not suit is commenced by Capital;

                    L.   Any  deficiency  which exists after  disposition of the
                         Collateral as provided  above will be paid  immediately
                         by  Borrower.  Any  excess  will be  returned,  without
                         interest and subject to the rights of third parties, to
                         Borrower by Capital.

     10.2 Cumulative Rights.  Capital's rights and remedies under this Agreement
and all other  agreements  shall be  cumulative.  Capital  shall  have all other
rights and remedies not  inconsistent  herewith as provided  under the Code,  by
law, or in equity. No exercise by Capital of one right or remedy shall be deemed
an election, and no waiver by Capital of any default on Borrower's part shall be
deemed a  continuing  waiver.  No delay by Capital  shall  constitute  a waiver,
election or acquiescence by it.

     11 TAXES AND EXPENSES REGARDING THE COLLATERAL
        -------------------------------------------

     If Borrower fails to pay any monies (whether taxes, assessments,  insurance
premiums,  or otherwise) due to third persons or entities,  or fails to make any
deposits or furnish any  required  proof of payment or deposit,  all as required
under the terms of this  Agreement,  then  Capital  may,  to the extent  that it
determines  in its sole  discretion  that such failure by Borrower  could have a
material  adverse  change  on  Capital's  interests  in the  Collateral,  in its
discretion and without prior notice to Borrower, (i) make payment of the same or
any part  thereof;  (ii) set up such  reserves  in  Borrower's  loan  account as
Capital  deems  necessary to protect  Capital from the exposure  created by such
failure;  or  (iii)  both.  Any  amounts  paid or  deposited  by  Capital  shall
constitute  Capital  Expenses,  shall be immediately  charged to Borrower's loan
account and become additional  Obligations owing to Capital, shall bear interest
at the applicable  rate set forth in Section 2.3.5,  and shall be secured by the
Collateral.  Any payments made by Capital shall not constitute: (i) an agreement
by Capital to make similar  payments in the future,  or (ii) a waiver by Capital
of any Event of Default under this Agreement. Capital need not inquire as to, or
contest the validity of, any such expense,  tax, security interest,  encumbrance
or lien,  and the receipt of the usual official  notice for the payment  thereof
shall be conclusive evidence that the same was validly due and owing.


     12 WAIVERS
        -------

     12.1  Application  of  Payments.  Borrower  waives  the right to direct the
application of any and all payments at any time or times  hereafter  received by
Capital on account of any Obligations owed by Borrower to Capital,  and Borrower
agrees  that  Capital  shall have the  continuing  exclusive  right to apply and
reapply   such   payments  in  any  manner  as  Capital   may  deem   advisable,
notwithstanding any entry by Capital upon its books.

     12.2 Demand,  Protest,  Default,  Etc. Except as otherwise provided herein,
Borrower  waives  demand,  protest,  notice of  protest,  notice of  default  or
dishonor,  notice of payment and  nonpayment,  notice of nonpayment at maturity,
release, compromise,  settlement,  extension or renewal of any or all commercial
paper, accounts,  documents,  instruments,  chattel paper, and guarantees at any
time held by Capital on which Borrower may in any way be liable.

     12.3  Maintenance  of  Collateral.  So long as  Capital  complies  with its
obligations,  if any, under Section 9-207 of the Code,  Capital shall not in any
way or manner be liable or responsible for: (a) the safekeeping of the Inventory
and/or  Equipment;  (b) any loss or damage  thereto  occurring or arising in any
manner or fashion from any cause;  (c) any diminution in the value  thereof;  or
(d) any act or default of any carrier,  warehouseman,  bailee, forwarding agency
or other  person  whomsoever.  All risk or loss,  damage or  destruction  of the
Inventory and Equipment shall be borne by Borrower.

     12.4  Confidential  Relationship.  Borrower  waives  the  right to assert a
confidential  relationship,  if any, it may have with any accounting firm and/or
service bureau in connection with any information  requested by Capital pursuant
to or in  accordance  with this  Agreement,  and agrees that Capital may contact
directly any such  accounting firm and/or service bureau in order to obtain such
information.

     13 NOTICES
        -------

     Unless otherwise  specifically  provided herein, all notices and service of
any process shall be in writing  addressed to the respective  party as set forth
below and may be  personally  served,  telecopied  or sent by overnight  courier
service or United  States  mail and shall be deemed to have been  given:  (a) if
delivered in person, when delivered;  (b) if delivered by telecopy,  on the date
of  transmission  if confirmed and if  transmitted on a Business Day before 4:00
p.m.  (eastern  standard time) or, if not, on the next succeeding  Business Day;
(c) if delivered by overnight  courier,  two days after delivery to such courier
properly addressed;  or (d) if by U.S. Mail, four Business Days after depositing
in the United States mail, with postage prepaid and properly addressed.

                  If to Borrower:   At the address specified on Schedule 1


                  If to Capital:            CAPITAL BUSINESS CREDIT,
                                            a division of Capital Factors, Inc.
                                            1640 Powers Ferry Road
                                            Building 22
                                            Marietta, GA  30339
                                            Attn:    Donald G. Wisdom,
                                            Senior Vice President
                                            Telecopier Number (770) 432-6046
                                            ----------------------------

                  With a copy to:           Michael G. Levine, Esq.
                                            Senior Vice President
                                            Capital Factors, Inc.
                                            120 E. Palmetto Park Road
                                            Boca Raton, FL 33432
                                            Telecopier Number (561) 347-9916

                                                    and

                                            Gary M. Krasna, Esq.
                                            Gary M. Krasna, P.A.
                                            1900 Corporate Boulevard, N.W.
                                            Suite 301W
                                            Boca Raton, Florida 33431
                                            Telecopier Number (561) 995-7775

     The  parties  hereto may  change  the  address at which they are to receive
notices  and the  telecopier  number  at which  they are to  receive  telecopies
hereunder, by notice in writing in the foregoing manner given to the other.

     14 DESTRUCTION OF BORROWER'S DOCUMENTS
        -----------------------------------

     Any documents, schedules, invoices or other papers delivered to Capital may
be destroyed or otherwise  disposed of by Capital four (4) months after they are
delivered to or received by Capital,  unless Borrower requests,  in writing, the
return of the said  documents,  schedules,  invoices  or other  papers and makes
arrangements, at Borrower's expense, for their return.

     15 CHOICE OF LAW
        -------------

     The  validity  of this  Agreement,  its  construction,  interpretation  and
enforcement,  and  the  rights  of the  parties  hereunder  and  concerning  the
Collateral,  shall be determined under, governed by, and construed in accordance
with the laws of the State of  Georgia.  The  parties  agree that all actions or
proceedings  arising  in  connection  with  this  Agreement  shall be tried  and
litigated  only in the state and federal courts located in the County of Fulton,
State of Georgia.  Borrower  waives any right it may have to assert the doctrine
of forum non  conveniens  or to object to such venue and hereby  consents to any
court ordered relief.

     16 CONCERNING REVISED ARTICLE 9 OF THE UNIFORM COMMERCIAL CODE.
        -----------------------------------------------------------

     The  parties  acknowledge  and agree to the  following  provisions  of this
Agreement  in  anticipation  of  the  possible  application,   in  one  or  more
jurisdictions to the transactions  contemplated hereby, of the revised Article 9
of the Uniform Commercial Code in the form or substantially in the form approved
by the American Law Institute and the National  Conference of  Commissioners  on
Uniform  State  Law and  contained  in the  1999  Official  Text of the  Uniform
Commercial Code ("Revised Article 9").

               a.  Attachment.  In applying the law of any jurisdiction in which
          Revised Article 9 is in effect,  the Collateral is  substantially  all
          assets of the  Borrower,  whether  or not  within the scope of Revised
          Article 9. The  Collateral  shall  include,  without  limitation,  the
          following  categories of assets as defined in Revised Article 9: goods
          (including   inventory  and  any   accessions   thereto),   equipment,
          instruments   (including   promissory  notes),   documents,   accounts
          (including health-care-insurance  receivables), chattel paper (whether
          tangible or electronic),  deposit  accounts,  letter-of-credit  rights
          (whether  or not the  letter  of credit is  evidenced  by a  writing),
          commercial tort claims,  securities and all other investment property,
          general  intangibles  (including  payment  intangibles  and software),
          supporting  obligations  and  any  and an  proceeds  of  any  thereof,
          wherever  located,  whether now owned and hereafter  acquired.  If the
          Borrower  shall at any time,  whether or not  Revised  Article 9 is in
          effect  in any  particular  jurisdiction,  acquire a  commercial  tort
          claim, as defined in Revised Article 9, the Borrower shall immediately
          notify  Capital  in a  writing  signed  by the  Borrower  of the brief
          details  thereof  and grant to  Capital  in such  writing  a  security
          interest  therein and in the proceeds  thereof,  all upon the terms of
          this  Agreement,  with  such  writing  to be  in  form  and  substance
          satisfactory to Capital.

               b. Perfection by Filing. Capital may at any time and from time to
          time,  pursuant  to the  provisions  of Section  4.7,  file  financing
          statements,   continuation  statements  and  amendments  thereto  that
          describe  the  Collateral  as all assets of the  Borrower  or words of
          similar  effect and which  contain any other  information  required by
          Part 5 of  Revised  Article 9 for the  sufficiency  or  filing  office
          acceptance  of any  financing  statement,  continuation  statement  or
          amendment, including whether the Borrower is an organization, the type
          of organization and any organization  identification  number issued to
          the Borrower.  The Borrower agrees to furnish any such  information to
          Capital  promptly  upon  request.   Any  such  financing   statements,
          continuation  statements  or  amendments  may be signed by  Capital on
          behalf of the  Borrower,  as provided in Section 4.7, and may be filed
          at any time in any  jurisdiction  whether or not Revised  Article 9 is
          then in effect in that jurisdiction.

               c. Other Perfection, etc. The Borrower shall at any time and from
          time to time,  whether  or not  Revised  Article 9 is in effect in any
          particular  jurisdiction,  take such steps as Capital  may  reasonably
          request  for  Capital  (a) to  obtain an  acknowledgment,  in form and
          substance  satisfactory to Capital, of any bailee having possession of
          any of the  Collateral  that the  bailee  holds  such  Collateral  for
          Capital, (b) to obtain "control" of any investment  property,  deposit
          accounts, letter-of-credit rights or electronic chattel paper (as such
          terms are defined in Revised Article 9 with  corresponding  provisions
          in Rev.  Sections  9-104,  9-105,  9106  and  9-107  relating  to what
          constitutes  "control"  for  such  items  of  Collateral),   with  any
          agreements   establishing   control  to  be  in  form  and   substance
          satisfactory  to Capital,  and (c)  otherwise to insure the  continued
          perfection and priority of Capital's  security  interest in any of the
          Collateral and of the  preservation of its rights therein,  whether in
          anticipation  and following the  effectiveness of Revised Article 9 in
          any jurisdiction.

               d. Savings Clause.  Nothing contained in this Article 16 shall be
          construed to narrow the scope of Capital's security interest in any of
          the Collateral or the  perfection or priority  thereof or to impair or
          otherwise limit any of the rights,  powers,  privileges or remedies of
          Capital  hereunder  except (and then only to the  extent)  mandated by
          Revised Article 9 to the extent then applicable.

     17. GENERAL PROVISIONS
         ------------------

     17.1 Representations and Warranties Repeated. Each representation, warranty
and agreement contained in this Agreement shall be automatically deemed repeated
with each advance and shall be  conclusively  presumed to have been relied on by
Capital  regardless  of any  investigation  made  or  information  possessed  by
Capital.  The warranties,  representations and agreements set forth herein shall
be cumulative and in addition to any and all other  warranties,  representations
and  agreements  which  Borrower  shall give, or cause to be given,  to Capital,
either now or hereafter.

     17.2  Binding  Agreement.  This  Agreement  shall  be  binding  and  deemed
effective when executed by Borrower and accepted and executed by Capital.

     17.3 Right to Grant Participations.  This Agreement shall bind and inure to
the benefit of the  respective  successors  and assigns of each of the  parties;
provided,  however , that  Borrower may not assign this  Agreement or any rights
hereunder without Capital's prior written consent and any prohibited  assignment
shall be  absolutely  void. No consent to an assignment by Capital shall release
Borrower from its Obligations to Capital.  Capital may assign this Agreement and
its rights and duties  hereunder.  Capital  reserves the right to sell,  assign,
transfer,  negotiate  or grant  participations  in all or any  part  of,  or any
interest in, Capital's rights and benefits hereunder.

     17.4  Indemnification.  In  consideration  of the execution and delivery of
this  Agreement  and the  extension  of financial  accommodations  by Capital to
Borrower  pursuant  to this  Agreement,  Borrower  agrees  to  indemnify,  save,
exonerate, and hold Capital, and each of the officers, directors,  employees and
agents of Capital (herein collectively called the "Indemnitees" and individually
called an "Indemnitee")  free and harmless from and against any and all actions,
claims,  causes of action,  suits, losses,  liabilities,  damages, and expenses,
including,  without limitation,  reasonable attorneys' fees (including allocated
costs for in-house legal services provided and attorneys' fees in all bankruptcy
proceedings)  and  disbursements  (herein  collectively  called the "Indemnified
Liabilities"),  which may be incurred by or asserted  against the Indemnitees or
any  Indemnitee  as a result  of,  or  arising  out of,  or  relating  to, or in
connection with, any investigation, litigation, or proceeding related to any use
made or proposed  to be made by Borrower of the  proceeds of any advance or loan
made hereunder,  or the  consummation of the transactions  contemplated  hereby,
whether or not any such Indemnitee is a party thereto, and, if and to the extent
that the foregoing  undertaking may be  unenforceable  for any reason,  Borrower
hereby agrees to make the maximum  contribution to the payment and  satisfaction
of each of the Indemnified Liabilities as is permissible under applicable law.

     If any action,  suit,  or  proceeding  arising from any of the foregoing is
brought  against  Capital,  or any  Indemnitee  or  affiliate  of an  Indemnitee
indemnified  or  intended  to be  indemnified  pursuant  to this  Section  17.4,
Borrower, to the extent and in the manner directed by the Indemnitee or intended
Indemnitee,  shall resist and defend such action,  suit,  or proceeding or cause
the same to be resisted and defended by counsel  designated  by Borrower  (which
counsel  shall  be  reasonably   satisfactory  to  the  Indemnitee  or  intended
Indemnitee).  Each  Indemnitee  shall use its best  efforts to  cooperate in the
defense  of any  such  action,  writ,  or  proceeding.  Borrower  shall  have no
obligation  to any  Indemnitee  under this  Section  17.4 to the extent that the
Indemnified Liabilities resulted from the gross negligence or willful misconduct
on the part of any  Indemnitee.  The  Obligations of Borrower under this Section
17.4 shall survive the  termination  of this  Agreement and the discharge of the
Borrower's other Obligations hereunder.

     17.5 Tax  Indemnification.  The  Borrower  agrees  to pay and save  Capital
harmless against any liability for payment of any state documentary stamp taxes,
intangible  taxes or similar taxes  (including  interest or  penalties,  if any)
which may now or  hereafter  be  determined  to be  payable  in  respect  to the
execution,  delivery  or  recording  of any Loan  Document  or the making of any
advance,  whether  originally  thought to be due or not, and  regardless  of any
mistake of fact or law on the part of Capital or the  Borrower  with  respect to
the  applicability  of such tax. The  provisions  of this section  shall survive
payment in full of the Obligations and termination of this Agreement.

     17.6 Section  Headings.  Section headings and section numbers have been set
forth  herein for  convenience  only.  Unless the  contrary is  compelled by the
context,  everything  contained in each section  applies  equally to this entire
Agreement.

     17.7  Interpretation.   Neither  this  Agreement  nor  any  uncertainty  or
ambiguity  herein shall be construed  or resolved  against  Capital or Borrower,
whether  under any rule of  construction  or otherwise.  On the  contrary,  this
Agreement  has  been  reviewed  by  all  parties  and  shall  be  construed  and
interpreted  according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of all parties hereto.

     17.8 Severability. Each provision of this Agreement shall be severable from
every other provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision.

     17.9  Modification  and  Merger.   This  Agreement  cannot  be  changed  or
terminated  orally.  All  prior  agreements,  understandings,   representations,
warranties and negotiations, if any, are merged into this Agreement.

     17.10 Compliance.  The Borrower,  for and in consideration of the making of
the loan  described  herein and future  advance  funding,  agree if requested by
Capital  or its  counsel,  Borrower  will fully  cooperate  and  execute  and/or
re-execute any document or documents due to clerical errors,  scrivener's errors
or relating  to  additional  matters due to receipt and review of  miscellaneous
required  items  post  closing,  or  otherwise  on any  or  all  of the  closing
documentation for the loan if deemed necessary,  using reasonable  discretion of
Capital and its counsel.

     17.11 Capital's Counsel.  In the event that Capital has utilized counsel in
connection with the closing of the transaction described in this Agreement, such
counsel ("Capital  Counsel") has (1) prepared certain documents  relating to the
Loan,  including,  among other  documents,  this  Agreement;  (2) examined  such
documents  as  Capital   Counsel  deemed   necessary  in  connection  with  this
transaction;  and (3) supervised the closing of the Loan.  Capital Counsel's fee
for  providing  these  services is stated on the Loan Closing  Statement.  These
legal  services  have been  performed  on behalf of Capital and not on behalf of
Borrower, and Capital Counsel's fees are being reimbursed to Lender by Borrower.

     17.12 JURY TRIAL.
           -----------

     CAPITAL, THE BORROWER AND THE GUARANTORS  ACKNOWLEDGE THAT THE TRANSACTIONS
AND MATTERS SET FORTH IN THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE COMPLEX
IN NATURE AND THAT ANY LITIGATION ARISING THEREFROM WOULD BE MOST APPROPRIATELY,
ECONOMICALLY AND SPEEDILY  RESOLVED BY A NON-JURY TRIAL.  THE BORROWER,  CAPITAL
AND THE GUARANTORS  THEREFOR HEREBY  KNOWINGLY,  VOLUNTARILY  AND  INTENTIONALLY
WAIVE  THE  RIGHT  THAT  THEY MAY HAVE TO A TRIAL BY JURY  WITH  RESPECT  TO ANY
LITIGATION,  DIRECTLY OR  INDIRECTLY,  BASED ON OR ARISING  OUT OF,  UNDER OR IN
CONNECTION  WITH THIS  AGREEMENT  OR ANY OTHER LOAN  DOCUMENTS  OR THE LOANS AND
FACILITIES  CONTEMPLATED HEREBY, OR IN ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENT (WHETHER WRITTEN OR ORAL) OR ACTIONS OR OMISSIONS OF ANY PARTY TO THIS
AGREEMENT.  THIS PROVISION IS A MATERIAL  INDUCEMENT FOR CAPITAL'S ENTERING INTO
THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. BORROWER AND
CAPITAL  EACH  WAIVE  ANY  RIGHT TO TRIAL BY JURY IN ANY  ACTION  OR  PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS.

     17.13 AUTOMATIC RELIEF FROM STAY AND OTHER BANKRUPTCY WAIVERS.
           -------------------------------------------------------

     THE BORROWER  AGREES THAT IF ANY PROCEEDING IS COMMENCED  UNDER TITLE 11 OF
THE UNITED STATES CODE RELATIVE TO IT, CAPITAL SHALL BE  AUTOMATICALLY  ENTITLED
TO IMMEDIATE RELIEF FROM STAY UNDER 11 U.S.C. ss.362 WITHOUT ESTABLISHING EQUITY
OR NEED OR LACK OF NEED FOR THE PROPERTY  SECURING THE LOANS OR CAUSE OR LACK OF
CAUSE,  AND THE  BORROWER  HEREBY  CONSENTS TO SUCH RELIEF,  IT BEING  EXPRESSLY
ACKNOWLEDGED  THAT THIS PROVISION WAS SPECIFICALLY  NEGOTIATED AND CONSTITUTES A
MATERIAL INDUCEMENT TO CAPITAL ENTERING INTO THIS AGREEMENT AND MAKING FINANCIAL
AND OTHER ACCOMMODATIONS AND ADDITIONAL ADVANCES CONTEMPLATED HEREIN.




     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement to be
effective on the date first set forth above.

           Witnesses:                      eNetpc,   Inc.  formerly  known  as
                                           CyberStar Computer  Corporation,  a
                                           Minnesota corporation

           _________________________ By: ---------------------------
                                              Jonathan Bumba
           _________________________ Its:     President
                                          --------------------------

                                           CAPITAL BUSINESS CREDIT,
                                           a  division  of  CAPITAL   FACTORS,
                                           INC., a Florida corporation


           __________________________By: ----------------------------
                                           Donald G. Wisdom
           __________________________      Senior Vice President
                                         ----------------------------

           STATE OF                           )
                                              ) SS:
           COUNTY OF                          )

     The foregoing  instrument was acknowledged before me this __ day of October
2000 by Jonathan Bumba as President of eNetpc,  Inc. formerly known as CyberStar
Computer Corporation, a Minnesota corporation,  on behalf of the corporation. He
[   ]    is    personally    known    to    me    or    [   ]    has    produced
_____________________________________, as identification.


                                            Notary Public,
                                            My Commission Expires:
                                            Print Name: ________________________
Commission Number:_________________
                                                              [NOTARIAL SEAL]

<PAGE>




                  STATE OF                           )
                                                     ) SS:
                  COUNTY OF                          )

     The foregoing instrument was acknowledged before me this ____ day of August
2000 by Donald G. Wisdom, as Senior Vice President of CAPITAL BUSINESS CREDIT, a
division  of CAPITAL  FACTORS,  INC.,  a Florida  corporation,  on behalf of the
corporation.   He  [  ]  is  personally   known  to  me  or  [  ]  has  produced
________________________________, as identification.





<PAGE>



                  AFFIDAVIT FOR EXECUTION OF LOAN AND SECURITY
                  --------------------------------------------
                     AGREEMENT WITHOUT THE STATE OF FLORIDA
                     --------------------------------------


                  STATE OF                                    )
                               -------------------------------
                                                              ) SS:
                  COUNTY OF                                   )

     BEFORE ME, the undersigned  authority,  personally appeared the undersigned
Jonathan Bumba (the  "Affiant"),  who being first duly sworn upon oath,  deposes
and says that he is the President of eNetpc,  Inc.  formerly  known as CyberStar
Computer Corporation,  a Minnesota corporation,  having a street address of 6825
Shady Oak Road, Eden Prairie,  Minnesota 55344, to me well known and who deposed
and said he executed and  delivered  that  certain  Loan and Security  Agreement
dated  October  ___,  2000,  in the maximum  amount of two million  five hundred
thousand dollars  ($2,500,000.00) (the "Agreement"),  which Agreement is between
eNetpc,  Inc.  formerly  known as CyberStar  Computer  Corporation,  a Minnesota
corporation,  as borrower,  and CAPITAL  BUSINESS  CREDIT, a division of CAPITAL
FACTORS,  INC., as lender, in the City of , State of . I then deposited the same
with Federal Express addressed to Mr. Donald G. Wisdom, Capital Business Credit,
a division of Capital  Factors,  Inc.,  1640 Powers  Ferry  Road,  Building  22,
Marietta, GA 30339.

                           FURTHER AFFIANT SAYETH NAUGHT.

                           ------------------------------
                           Jonathan Bumba, President


     SWORN TO AND  SUBSCRIBED  before me this _____ day of  October___,  2000 by
________________,  who personally  appeared before me, and who [ ] is personally
known to me or [ ] has produced  __________________________________________,  as
identification.


                         Notary Public, State of
                         Print Name: ___________________
                         My Commission Expires: ________

                                 [NOTARIAL SEAL]


<PAGE>



                  STATE OF GEORGIA                   )
                                                     ) SS:
                  COUNTY OF CLAYTON                  )

                       AFFIDAVIT OF OUT-OF-STATE DELIVERY

     BEFORE ME, the undersigned  authority,  personally appeared the undersigned
Donald G. Wisdom (the "Affiant"),  who being first duly sworn upon oath, deposes
and says that:

     1. The Affiant is a Senior Vice  President of CAPITAL  BUSINESS  CREDIT,  a
division of CAPITAL FACTORS,  INC., a Florida corporation  ("Factors"),  and the
Affiant is duly  authorized to and does make this  affidavit in said capacity on
behalf of Factors.

     2. That on the ___ day of October,  2000, I received and executed on behalf
of Factors that certain Loan and Security Agreement dated October____,  2000, in
the maximum amount of two million five hundred thousand dollars  ($2,500,000.00)
(the  "Agreement"),  which Agreement is between eNetpc,  Inc.  formerly known as
CyberStar  Computer  Corporation,  a Minnesota  corporation,  as  borrower,  and
CAPITAL BUSINESS CREDIT, a division of CAPITAL FACTORS, INC., as lender.

     3.  That the  execution of the  Agreement  by the  Borrower  took place in
City of                   , State of                         .
       ------------------          ---------------------------

     4. That I accepted  delivery of, and executed the  Agreement on behalf of
Factors in the city of Marietta, State of Georgia.

                           FURTHER AFFIANT SAYETH NAUGHT.

                                                   ---------------------------
                                                   Donald G. Wisdom, Affiant
                                                   Title:  Senior Vice President

     SWORN TO AND SUBSCRIBED  before me this _____ day of October ____,  2000 by
Donald G. Wisdom,  who personally  appeared before me, and who [ ] is personally
known to me or [ ] has  produced  _________________________________________,  as
identification.


                                                          ----------------------
Notary Public, State of
                                                 Print Name: ___________________
                                                 My Commission Expires: ________
                                                         [NOTARIAL SEAL]

<PAGE>

                                   SCHEDULE 1
                                   ----------

     1. "Term Days" as referred to in Section 1.14 means 30 from invoice date.
                                                         ---------------------

     2.  "Past Due  Days" as  referred  to in  Section  1.14  means 90 days from
invoice date.                                                       ------------
------------

     3. "Cross Aging Percentage" as referred to in Section 1.14 means 50%.

     4. "Guarantor" and "Guarantors" as referred to in Section 1.21 means:

                          Mr. Richard A. Pomije.

     5. "Lock Box" as referred to in Section 1.27 means:

                 Operations Center
                 Post Office Box 601699
                 Charlotte, NC  28260-1699

     6.  "Maximum  Credit Line" as referred to in Section 1.30 means TWO MILLION
FIVE HUNDRED THOUSAND DOLLARS ($2,500,000.00).
                      -----------------------

     7. "Subordinated Creditor" as referred to in Section 1.37 means

                          None

     8. "Term" as  referred to in Section  1.40 means one (1) year from the date
hereof.  The Term shall thereafter be  automatically  renewed (a "Renewal Term")
for successive  periods of one (1) year unless terminated by either party as set
forth below, which termination shall be effective on an anniversary date of this
Agreement.  Notice of such termination  shall be effectuated by the mailing of a
certified  letter,  return  receipt  requested,  not less than  thirty (30) days
immediately  prior to the effective date of such  termination,  addressed to the
other party in the manner and the address referred to in Section 13.

     9.  "Advance  Percentage"  as referred to in Section 2.1 means  eighty-five
percent (85%).                                                       -----------
-------------

     10. "Margin" as referred to in Section 2.3.5 means four percent (4.0%). The
Governing  Rate on the date hereof is equal to thirteen and  one-half  percent (
13.5%)  (The  Margin plus the Prime  Rate).  So long as the ratio of  Borrower's
total liabilities,  as determined by GAAP, to the Borrower's  Tangible Net Worth
is no greater than four to one (4:1) and net income (as  determined  by GAAP) is
positive on a trailing twelve month period, then Margin shall mean three percent
(3.0%).  In the event that the Borrower  fails to maintain  the above  financial
covenants, then the Margin will immediately revert to four percent (4%).

     11. "Reporting Period" as referred to in Section 2.3.6 means week.
                                                                  ----

     12. "Collection Day Period" as referred to in Section 2.3.7 means 2 days.

     13. The Borrower will pay the following  fees to Capital,  which fees shall
be fully  earned  when due and shall not be  refundable  to the  Borrower in any
event:

          a.  Loan   Administration  Fee.  Borrower  will  pay  Capital  a  Loan
     Administration  Fee equal to the difference between one percent (1%) of the
     Maximum  Credit Line and the actual  interest  paid to Capital  during each
     twelve month Term of the Agreement. Such fee shall be payable at the end of
     the Term.  In the event that the  Agreement is terminated at any time prior
     to the expiration of the Term, the Loan Administration Fee shall be payable
     at such time.

     14. The Borrower's chief executive  office,  as referred to in Section 6.1A
is:
                           6825 Shady Oak Road
                           Eden Prairie, MN 55344
                                                 ------

     15. The Borrower is a  ___X__corporation,  _____limited  liability  company
_______limited  partnership ______general partnership ______sole proprietor, for
the purposes of Section 6.1 B (check one)

     16. "State of Incorporation" as referred to in Section 6.1 B. is Minnesota.

     17. "Broker" as referred to in Section 6.13 is none.

     18. "Monthly  Reporting  Period" as referred to in Section 7.9 B. (i) means
forty-five (45) days after the end of each month.

     19. "Monthly  Reporting  Level" as referred to in Section 7.9 B. (i) means:
internally prepared financial statements certified by Borrower's management.

     20. "Annual  Reporting  Period" as referred to in Section 7.9 B. (ii) means
ninety (90) days after the end of each of the Borrower's fiscal years.

     21.  "Annual  Reporting  Level" as referred to in Section 7.9 B. (ii) means
Audited  financial   statements   prepared  by  a  Certified  Public  Accountant
acceptable to Capital.

     22.  The  Borrower  shall at all times  maintain  the  following  financial
covenants:

1. Borrower's  total  Obligations  under the Agreement shall not exceed five (5)
times the Borrower's Tangible Net Worth.

     23. Notices to the Borrower under Section 13 shall be sent to:

      If to Borrower:        eNetpc, Inc., a Minnesota corporation
                             6825 Shady Oak Road
                             Eden Prairie, MN 55344
                             Attn: Jonathan Bumba, President
                             Telecopier Number (952) 943-1599

     24. The following  additional  terms and conditions are made a part of this
Agreement:

          a. Sections 1.14 (d) is deleted in its entirety,  and the following is
     substituted in its place:

                    "(d)  Accounts  with respect to which the account  debtor is
                    the   United   States   or   any   department,   agency   or
                    instrumentality  of the United  States;  provided,  however,
                    that an Account shall not be deemed  ineligible by reason of
                    this  clause (d) if the  aggregate  amount of such  Accounts
                    does not exceed five percent (5%) of the total of Borrower's
                    Accounts  outstanding,  or in the event aggregate  amount of
                    such  Accounts does exceed five percent (5%) of the total of
                    Borrower's Accounts outstanding, that Borrower has completed
                    all of the steps necessary,  in the sole opinion of Capital,
                    to comply with the Federal  Assignment of Claims Act of 1940
                    (31 U.S.C. ss.203) with respect to such Account;"

          b. The following is added at the end of Section 4.2:

                    "Prior to the  occurrence  of an Event of Default,  the cost
                    and  frequency  of field  examinations  will be  limited  as
                    follows:  (i).  Capital may perform at least three (3) field
                    examinations  per  annum;  and (ii)  the  cost of the  field
                    examinations   will   not   exceed   $2,250.00   per   field
                    examination.  Upon and after the  occurrence  of an Event of
                    Default,  there will be no  limitation  on the cost of field
                    examinations."

          c. The following is added as Section 6.14:

                    "6.14  Securities  Compliance  The Borrower is in compliance
                    with all federal and state laws and regulations with respect
                    to the issuance of securities, including but not limited to,
                    disclosure and reporting  obligations  and all other matters
                    relative thereto."

          d. The following is added at the end of Section 7.9:

                    "C. The  Borrower  will  provide to Capital,  promptly  upon
                    receipt  thereof,   copies  of  any  reports   submitted  by
                    independent  certified public accountants in connection with
                    examination  of the financial  statements of the Borrower or
                    any subsidiary or any Guarantor made by such accountants.

                    The  Borrower  will provide to Capital,  promptly  after the
                    furnishing  thereof,  copies  of  any  statement  or  report
                    furnished  to any other  party  pursuant to the terms of any
                    indenture,   loan,  credit  or  similar  agreement  and  not
                    otherwise required to be furnished to Capital.

                    E. The Borrower will provide to Capital,  promptly after the
                    sending or filing thereof,  copies of all proxy  statements,
                    financial  statements  and reports which the Borrower or any
                    subsidiary  sends to its  stockholders,  and  copies  of all
                    regular,  periodic and special reports, and all registration
                    statements  which the Borrower or any subsidiary  files with
                    the  SEC  or  any   governmental   authority  which  may  be
                    substituted   therefore,   or  with  any  national  security
                    exchange."

          e.  Section  8.4  (A) is  hereby  deleted  in its  entirety,  and  the
     following is substituted in its place:

                    "Sell,  lease,  or  otherwise  dispose  of,  move,  relocate
                    (except  in  connection  with  a  relocation  of  Borrower's
                    business   facility)  or   transfer,   whether  by  sale  or
                    otherwise,   any  of  Borrower's  assets,  except  sales  of
                    Inventory in the  ordinary  and usual  course of  Borrower's
                    business as presently  conducted  and except for the sale of
                    other  assets of the  Borrower  in excess of  $25,000 ( book
                    value  basis) in each of the  Borrower's  fiscal  years on a
                    non-cumulative  basis.  Any sales of assets (except sales of
                    Inventory in the  ordinary  and usual  course of  Borrower's
                    business as presently  conducted)  in excess of $25,000.00 (
                    book value basis) in each of the Borrower's  fiscal years on
                    a non-cumulative  basis, shall be subject to Capital's prior
                    written consent;"


     25. The Borrower  presently conducts its business under the following trade
names:

1.       CyberStar
2.       EZPC
3.       International Trade Center
4.       eNetpc

                    The Borrower shall immediately furnish written  notification
                    to Capital of any change of  corporate  name of the Borrower
                    or the use of any trade name.

     THIS  SCHEDULE  1 IS MADE A PART OF AND  INCORPORATED  INTO  THE  LOAN  AND
SECURITY AGREEMENT.



<PAGE>


                                    INDEX TO EXHIBITS


                  A. Borrowing Base Certificate
                  B. List of Borrower's Officers
                  C. Litigation Listing
                  D. Compliance Certificate
                  E.  Inventory Locations



<PAGE>


                                    EXHIBIT A
                       Opening Borrowing Base Certificate






<PAGE>


                                    EXHIBIT B
                                    Officers


                  All officers of Borrower are listed below:

                  Mr. Jonathan Bumba, President
                  Richard A. Pomije, Treasurer
                  Richard A. Pomije, Secretary
                  Brian Fredrickson, National Marketing Manager
                  Richard Palmer, Senior Buyer
                  Richard A. Pomije, Chairman of the Board
                  James T. Greenfield, Director
                  Ed Havlik, Director




<PAGE>


                                    EXHIBIT C
                                   Litigation


     All litigation of Borrower,  its officers,  directors or shareholders,  and
guarantors, whether as plaintiff or defendant, are listed below:

                  Martin J. McIntyre V Borrower
                  Borrower V Euler Solutions




<PAGE>


                                    EXHIBIT D

                              eNetpc, Inc., a Minnesota corporation
                              6825 Shady Oak Road
                              Eden Prairie, MN 55344


____        , 2000__


Capital Business Credit
1640 Powers Ferry Road
Building 22
Marietta, Georgia 30339

The  undersigned,  the of eNetpc,  Inc., a Minnesota  corporation  ("Borrower"),
gives this certificate to CAPITAL BUSINESS CREDIT  ("Lender") in accordance with
the requirements of that certain Loan and Security Agreement dated as of October
, 2000, between Borrower and Lender ("Loan  Agreement").  Capitalized terms used
in this Certificate,  unless otherwise  defined herein,  shall have the meanings
ascribed to them in the Loan Agreement.

     Based upon my review of the balance  sheets and statements of income of the
Borrower for the [fiscal year] [monthly  period] ending , 2000,  copies of which
are attached hereto, I hereby certify that:

     The Borrower's total  Obligations  under the Loan Agreement are $ , and the
Borrower's  Tangible Net Worth is $ . The Borrower's total Obligations under the
Loan Agreement  [do] [do not] exceed five (5) times the Borrower's  Tangible Net
Worth

     No Event of Default  exists on the date hereof,  other than:
                                                                 ---------------
     [if none,  so  state].

     As of the date  hereof,  Borrower  is current in its payment of all accrued
     rent and other  charges to Persons who own or lease any premises  where any
     of the Collateral is located,  and there are no pending  disputes or claims
     regarding Borrower's failure to pay or delay in payment of any such rent or
     other charges.

                                            Yours truly,

                                            --------------------------

                                            --------------------------
                                            Name/title





<PAGE>


                                    EXHIBIT E
                        Inventory and Equipment Locations

Inventory and  equipment of Borrower may be located at the following  locations,
including but not limited to those locations owned,  rented,  leased or occupied
by the  Borrower  (including  inventory  and  equipment  located  or  stored  at
locations of customers, venders, public warehouses, or other):

                                       5825 Shady Oak Road
                                       Eden Prairie, MN 55344

                                       1270 Broadway
                                       Suite 112
                                       Tempe, AZ 85282